All Forum Posts by: Tim Lucas

See this thread. https://www.biggerpockets.com/forums/643/topics/993980-investment-property-heloc?

Yes, there are lots of CUs and banks that will let you do a HELOC on an investment property. Also try a business loan with the bank's biz lending dept.

Hurst Lending
Castle & Cooke Mortgage. Home equity loans only, no lines of credit.

I created a mega-list of 203k consultants in every state. Each state has about 10-20 of them so there's likely one in your area. DM me for the link since I can't post it here.

@Paul Welden where did you find information on lenders that have done a 203k in the past year?

FHA's guidelines seem to have changed. Now the 4000.1 says: "For any property with two or more units, a separate additional dwelling unit must be considered as an additional unit."

So it just calls the ADU another unit if it's on the same property as a duplex or triplex.

Correct me if that's not how it's panning out in real life!

@Ryan Avila There are 2 totally separate topics here.

1. Eligibility
2. Qualification

1. Eligibility: For a 3-4 unit to be 'eligible' for FHA, it must pass the FHA self-sufficiency test. For 'eligibility' you can use the owner-occupied unit's rental income to try to meet the self-sufficiency requirements. A property might be 'eligible' even if the applicant does not qualify. This FHA self-sufficiency calculator estimates whether a property is 'eligible'.

2. Qualification: means your DTI, credit, etc. meet FHA guidelines, ie the lender believes you can repay the loan. For 'qualification' you can NOT use projected rent from the owner-occupied unit since you'll be living there.

The self-sufficiency test tells HUD they can at least break even on the PITI if they have to foreclose. If they foreclose, you're not there anymore, so they can rent out ALL units. But you're right, this has nothing to do with #2 'qualification'. The owner-occupied unit can't help you meet DTI.

See https://answers.hud.gov/FHA/s/...

@Murtuza Bengali you are right. As prices and rates have risen, it's gotten tougher to find a 3-4 unit house hack using FHA.

@Ryan Avila you can use rent from the unit you will be occupying to help pass the self-sufficiency test.

Here's a handy FHA self-sufficiency calculator with a simple pass/fail result if you want to run numbers or figure out how to get a property to pass the test putting more down, getting a lower rate, etc: https://thisismortgage.com/fha-self-sufficiency-test-calculator/

Here's an FHA self sufficiency calculator that uses a 25% vacancy factor which sounds like what most of the country uses. Could be a good tool to use to run preliminary numbers on a property. https://thisismortgage.com/fha-self-sufficiency-test-calculator/

@Doug S. makes a good point. In lower cash flow areas, house hacking with FHA is now pretty tough. If you just want to run some numbers on a property, here's an FHA self sufficiency test calculator that's pretty handy. https://thisismortgage.com/fha-self-sufficiency-test-calculator/