All Forum Posts by: Matthew Roder

@Justin Sumulong.....Yes, what they said :-)  @Jeff Brower and @Brie Schmidt

Andrew Zimmermann yes, you can finance a 3-4 unit with this product.

Jeff Burdick no, the program is not limited to first time buyers. However, you cannot own another property at the time. So if you currently own an investment, or will be turning your current primary into a rental, it won't work.

I was just listening to podcast #210, where a couple of different newbie investors shared their house hacking success stories. I wanted to share some knowledge in regards to financing a deal like this. Conventional mortgage guidelines require a down payment of at least 15% for a 2-4 unit property when buying as your primary residence. Due to the high down payment requirement, most house hackers will finance using FHA. The biggest drawback of FHA financing is that the PMI is for the life of the loan, not to mention there is a hefty 1.75% upfront mortgage insurance charged. There is a program through Freddie Mac however (conventional financing) called Home Possible. Utilizing this program buyers can put down 5% and since it is a conventional loan, the PMI will then go away once the balance of the loan is paid down to 78% loan-to-value. As long as the property is located in a 'targeted area', then there are no income restrictions on this program. Where I live, in the Chicago area, I've yet to come across a property that doesn't qualify. This is a great program for someone looking to house hack.

If you're planning on buying more properties, the 30 year fixed might make sense, due to cash flow. Either way, those rates and fees both seem too high. You should shop around. My office is in Schaumburg if you want another quote.

3.5% is possible with a credit score over 740, no points, 30 year fixed conventional.