All Forum Posts by: Michael Emmanuel

Once you purchase a home regardless if it is 20% down or not you would then be capped at 5% down conventional. You could still potentially qualify for FHA 3.5% down, but if you are looking for true Fannie/Freddie financing then those are the guidelines they set. There are still down payment assistance options or portfolio products for lesser of a downpayment but your terms on those are worse. Purchasing the primary for 3% down first will lower the risk of running into DTI issues since you can use a no-income product for the investment later. If done the other way around, the terms of your preapproval will change.

With residential financing, you cannot purchase directly into a LLC (unless you look at DSCR) but that still would limit you to the 5% down conventional.

Thanks for your response, Derek. That's informative, and creates more detailing questions. Is it possible to buy the rental first on LLC? Would that exclude it from the DTI calculation?I was thinking that purchasing the rental on LLC would not affect me getting 3% down conventional loan and would not affect DTI.

Thank you,

0 Votes

Cleveland, Ohio

Hello,

I have a preapproval for 3% down payment conventional loan, as I own no property.

Haven't found a house I like, I wanna be patient looking for my to live-in house, but I still wanna get a rental property where income covers all costs while looking for my own house.

My question is, can I get a normal 20% down conventional loan for the rental, and then later I get a conventional 3% down loan for my house? Or the 3% down conventional has to be for the first time ever property?

Also will I have to buy the first rental under LLC to qualify for the 3% down loan later? Can I even buy a rental straight under LLC?

Thank you very much

3 Votes

Cleveland, Ohio

Thanks everyone for the replies. That's very helpful.

So this conventional loan does not have any primary residence requirement, according to the loan officer. The lender said that only the first conventional loan can be with 3% down, and after that it would be with 20% down. There is a requirement for that loan, which is to not own a house before getting the loan. Meaning, if I get a house on FHA loan, I would no longer be able to get the 3% down conventional loan.

So the approach I was thinking to do is to purchase a rental house with the 3% down conventional loan first, then purchase right away another house with FHA loan for me to live in. How smooth would that be? An important question that pops up is: can I get FHA loan right after purchasing a house on a non-FHA loan? Is there a requirement for FHA loan that I haven't purchased a property recently?

As of being able to afford paying both mortgages and expenses for the long term, I was thinking that the first house on conventional loan would be rental, and the rent would cover all the payments and expenses. In that case, would that be excluded from my DTI ratio?

It's very exciting if I can make this work out.

Thank you,

1 Vote

I just got an approval letter for a conventional loan for only 3% down. I didn't know that there was a thing for 3% down payment conventional loan.

Now that I have enough saved to buy 2 houses with 3% down, I wanna buy one with a conventional loan and one with FHA loan.

Has anyone done this before? Any idea how that works? Any advices and instructions to how make this work will be greatly appreciated.

0 Votes

All Forum Posts by: Michael Emmanuel

Michael Emmanuel has started 2 posts and replied 4 times.

Post: Two convensional loans, one to live in and one rental at the same time.

Post: Two convensional loans, one to live in and one rental at the same time.

Post: Can I get a conventional loan and FHA loan at the same time?

Post: Can I get a conventional loan and FHA loan at the same time?