All Forum Posts by: Derek Brickley

Going to depend on the lender. A few told me I wouldn't be able to use an FHA again because my properties were too close together (i.e. less than 100 miles apart). Another lender told me I could write a letter for any reason and he could get it approved, which he did. My excuse, I needed more space because I was remote. Now my route yes was a plead for more space (even though I went from a duplex to a duplex) so just find the right lender and get creative:

-I want to be closer to work

-I want a home office 

-the house is haunted

-My neighbors scare me

-I'm trying to start a family

-An in-law needs to live with me

Find the right lender and this won't be an issue.

So the will be looking that the occupancy makes sense … I’ve been in lending 22 years and run a mtg co, was an underwriter for a while

basically you won’t be able to do a lateral move because then it will be obvious your building a portfolio and it’s an investment, so yea the lenders telling you it needs to be a move up are correct for the most part 

but closer to work is considered a motivating factor and would work, so ideally I’d buy the first one on the outskirts of max distance you’ll be willing to commute , then find one closer to work with small sf .. it’ll make sense your moving closer to work

if from there you buy units that are larger in sf, and still similar or closer distance to work, that’s considered a move up going from a 4 unit to 2 unit , from units to a Sfr, all of that would be considered a move up 

going l from attached to detached, relocating from work, it just has to make clear sense for your motivation to buy and occupy the new p property other than simply adding to your portfolio 

I would keep in mind that if you get a duplex, triplex, or quad you are going to have to put 15% down with a Conventional loan. 

With FHA you can get a duplex for 3.5-5% down. Do know that FHA has a self sufficiency test on triplex and fourplexes. In order to pass the self-sufficiency test, you'll need to prove that 75% of the rental income you're likely to receive will exceed the full monthly mortgage payment. If not, you will have to put 15-20% down for triplexes and fourplexes with FHA. FYI there is no self sufficiency test for a duplex.

@Amy Lee I need to provide some clarification on your post if you don't mind.

1. Downpayment - there is no 5% downpayment using a conventional loan with a 2-4 unit property.  A few years back there was, but there hasn't been that option for a while now.  So your options using a conventional loan are 15% down with a duplex as your own primary home and 20% down with a 2-4 unit property. 

2. FHA Rules - now FHA has this rule called the "self-sufficiency" rule on 3-4 units properties. This rule basically states that the rents have to be OVER the mortgage payment. And since rates are so high right now, and properties are so expensive, satisfying the "self-sufficiency" rule is next to impossible. And that means no FHA loans on 3-4 unit properties right now. This is an economic environment problem that will not always be around but be aware of this. Keep in mind that this does not apply on duplexes.

I know that was a lot but feel free to ask anything additional.  Thanks!

What would be the perks of using an FHA loan to househack on a multi family home (duplex-triplex)? There's the lower down payment but that makes your mortgage higher, you have to pay the the PMI (I forgot the term on FHA loans) for less than 20% down payment that lasts the life of the loan in my understanding, paperwork can be a lot I hear, and takes longer to close. So the only benefit is the lower down payment which you can do on a conventional loan also. Can someone educate me? Thank you!!

Very new to real estate and want to create actionable steps towards getting my first home. My goal is to house hack.

I want to figure out how much I can qualify for with an FHA pre-approval calculator. The calculators I have found do not seem to increase what I can afford as they do not consider house hacking rental income. Does anybody know a good tool for this?