All Forum Posts by: Derek Brickley

Hey Johnny!  

I'm not sure who you're working with but the fact they are showing you their par pricing is actually a great sign.  I closed on a househack in December at 8.625%.  The main difference right now that you would see between a primary and an investment property is the fees.  You would probably have the same rate on an investment, but you would be paying 2-4 points for that.  

You can always consider buying down the rate, but the reason we don't recommend it right now (and the reason I didn't in December) is because your recoup period on paying points in generally 3-4 years right now. Of course we don't know the exact time it will take rates to drop, but the expected time frame is 6-12 months.  It never hurts to get other quotes for you as a buyer though.  If you feel like a broker might be helpful, just be sure to take note of how much the broker fees will cost you.

That's good, so then you would have a few options potentially. Depending on your situation, it may or may not be better to go one way or the other (FHA v. Conventional).

Hey Dante! Sounds like you already have one househack? If so, do you have an FHA loan on that property? Would need to know a bit more about your situation and what you might actually be looking for to see if we might be able to help. I more or less used myself for my househack and investments and I'd like to think it has all worked out well

Hey Tom! As mentioned above, the foreclosure wouldn't be an issue in itself. The work history would be the main reason for not getting an approval conventional. You could look at those NQM type loans like bank statement programs that only look at 12 months, but even those will have higher rates/fees than a conventional might. Just from what you've said here, you may want to explore a DSCR investment loan. This way, a lender won't be looking or asking any income questions, it would just come down to what income the property would bring in. Rates are higher than a conventional investment, but in some cases you may find these have lower fees since a DSCR lender isn't controlled by Fannie/Freddie loan level pricing adjustments.

Depending on your situation, PMI may be higher and you may have a slightly higher rate. One thing we have noted as troublesome for some potential househackers with this conventional program is that in order to use rental income from the other units towards qualifying you need to have some current housing expense verified (rent, a mortgage, etc.) Without that, you would need to qualify on your income by itself.

Nope!  It's a newer program, just announced back in December.  I purchased a 2-unit househack with the 5% conventional as soon as it came out.

Hey Natali!

Yes you can use either FHA or Conventional for 3.5% or 5% down respectively. FHA 3-4 units has a self-sufficiency test which can be difficult to pass in higher priced markets where the rent from the other units needs to be greater than or equal to your total housing payment. Benefit to the conventional option is that this does not apply. Hard to say right off the bat which is a better option since it depends a lot on what you are looking for and your situation but speaking with a lender that understands the application of primary residence loans in multifamily will be important to help you find the right option.

Hey Richard, DSCR value seasoning as mentioned can be slim to none but at that point the property value might be an issue. Do you have an ARV? If you've owned the property 12 months you shouldn't have any problem with value seasoning.

Any investment property is going to require a 15% down payment minimum and so no there won't be any way around that. If it is currently rented then you will need proof of a notice to vacate given to the current tenants. Sounds like you are trying to use a primary residence loan for an investment, so maybe it would be beneficial to look into 2-4 unit primary residences. FHA 3.5% down or conventional 5% down.

Just to make sure I understand, what are you planning to do with the property?  It sounds like this is an investment property, so what are you hoping to do here?