All Forum Posts by: Nick Miano

Thank you! What I'm finding is that conventional single family loans I can get for ~5% down but once I start looking at conventional loans for 2 unit they go up to ~15% down and higher the more units the property

You should consider shopping around for a different loan officer maybe a broker. I closed on a duplex with 5% down December of last year. Am looking for my next house hack and my loan officer mentioned I could get approved on a 5% down 2-4 units as well. She even mentioned she could factor rents from the current unit I live in to lower my debt to income ratio. Don’t give up and settle for something you don’t wanna live in either.

I'm definitely going to shop around more. Thanks for the advice!

0 Votes

Boston, Massachusetts

0 Votes

Boston, Massachusetts

Quote from @Katherine Serrell:

So this is tricky. I am living in my 3rd househack now I ran into this as well more than once. Basically to make someone believe you are not trying to use the FHA loan "as a vehicle for obtaining investment properties" you have to have a "jump" i.e. the underwriters ask themselves "Why would someone want to buy a not-so-amazing quadplex in a not-so-amazing area when they already own a perfectly good, updated 2 bedroom condo in a great area close to work?" In my experience, this is also true for other types of financing for primary residences.

For this reason, many people start with a multifamily home then "jump" to a better quality one in a better area or to a townhome, small single family home, etc. Then, the next "jump" might be a larger single family home or a single family home with a garage, a single family home walking distance from work, a home with a backyard etc etc.

You basically just have to be able to justify the move with something tangible.

Your options are:

1. Buy something that is a "jump" and househack that ..so in your case, buy a single family or a townhome.

2. Refiance your condo into a commercial loan or investment property loan

3. Call, call, and call lenders until you find someone who thinks they can get this through underwriting. In my experience, its very unlikely.

Thank you! This seems to be exactly what's happening. My lender said I should write an explanation letter to the underwriter explaining why I'm moving from my condo to a multifamily and of course I was honest saying I wanted it as an investment property and to use it as an opportunity to get landlord experience. The underwriter rejected it for that reason. I was considering going the townhouse route as well so this might be what I do. Thank you for the advice! Time to get a little creative :)

0 Votes

Boston, Massachusetts

Hello,

I live in Massachusetts and currently have a loan out on my primary residence which is a 2 bedroom condo. I recently applied to get pre-approved for an FHA loan to purchase a multi-family home which I was going to move into as my new primary residence. The loan was denied because of the below clause:

(b) FHA-Insured Mortgages on Principal Residences

FHA will not insure more than one Property as a Principal Residence for any Borrower, except as noted below. FHA will not insure a Mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining Investment Properties, even if the Property to be insured will be the only one owned using FHA mortgage insurance

I know a lot of people use FHA for multi-family but is it always the first loan they take out? Has anyone else ran into this hurdle? Any way I can still use an FHA loan without paying off the entirety of my current loan first? Is this something lender specific?

Thanks!

0 Votes

Boston, Massachusetts

All Forum Posts by: Nick Miano

Nick Miano has started 1 posts and replied 4 times.

Post: Hurdles trying to obtain FHA loan in MA

Post: Hurdles trying to obtain FHA loan in MA

Post: Hurdles trying to obtain FHA loan in MA

Post: Hurdles trying to obtain FHA loan in MA