All Forum Posts by: Torrell Palmason

Hey Angie,

So if your current home is a FHA that you are going to Refinance to a conventional then you will need 25% equity to make the switch or cash to close to bring the loan to to 75% Loan to Value. @Wayne Brooks had it right, you will have to explain to any lender that you are making the switch and intend to live in the new multifamily and supply a reason for the move. 

Another option for a second home that you have is a Freddie Mac Home Possible. If you have lived in your FHA for a year and don't quite have the 25% equity this will be a great option for you as you can leave the FHA loan alone until you have the 25% equity and still move into a new property. Instead of the the 3.5% down for FHA the Home Possible is as low as 5% depending on credit which still offers a great option for affordability. Unlike the FHA loan which has Mortgage insurance for the life of the loan the Home possible follows conventional guidelines which mortgage insurance can be cancelled at 80% LTV. This loan like FHA requires owner occupied for minimum of a year. The downside of this loan is that it is only available if you have ownership in 2 mortgages or less including the Home Possible.

Best of Luck!

So this will be a slightly lengthy answer so bear with me.

Based on your current situation with your Mortgage and your HELOC the max Combined loan to Value(CLTV) for a Principal Residence cash-out refi is 80% in a 1 unit and 75% in a 2-4 unit, In a investment property cash-out refi the CLTV on a 1 unit is 75% and 2-4 unit is 70% .
As I don't know the value of your home I'm going to use 400k  and a Principal Residence 1 unit for this scenario. At 400k the max CLTV for the Cash-out refi would be 320k or 80%, If your loan is 400k and 150k equity that would put your current loan at 250k. If the current first mortgage is at 250k and we add the 75k HELOC that would put you at 325k so you would not be able to draw any more out with a cash out-refi as you would be above the 80% threshold. Once again this is only a scenario to help try to help as I do not have your actual numbers to give you a better idea. 

The way you should have proceeded was to first do a Cash-out Refi on the property and draw to the max allowed by your scenario then get a HELOC, as a HELOC with allow you to go as high as 100% CLTV with most stopping at 90% CLTV

Best of Luck!

Typical hard money is 10 to 12 percent interest only for 6-12 months, just long enough to get you through acquisition and rehab. Then you can do a no cash out refi with no seasoning requirement or if you want cash out it requires 6 months seasoning on title. So plan your rehab accordingly.

Best of Luck! 

So to convert the FHA into a non-owner occupied Conventional you will need to have 25% equity in the home after that you will be good to use FHA for a owner occupied again.

Best of Luck!

It took me a minute to think of a good strategy for you but here we go. If you went with the first as an owner occupied FHA Multi family 3.5% down you would have to live there a year. On the second I'd recommend a Freddie Mac Home Possible which would be 5% down on a 2-to-4 unit with the same requirement of owner occupied for a year. In the time of living at the second for a year you should have 25% equity in the first FHA to switch it over to a conventional and free up your FHA for another Owner occupied 2-to-4 unit. At this point you'd have three cash flowing multi-family properties and if you wanted more should be able to get the down payment for a conventional loan from there on out.

Best of Luck!

@Junji Yokota 

Yes, the COVID small business loan will still be considered debt. While it can be a grant most lenders will look at it as debt simply because of worse case scenarios.  Long story short you will need to count the loan in your debt-to-income ratio.

Best of Luck!

If it is Owner Occupied there are two main options I'd look at, that is FHA and Freddie Mac Home Possible.

FHA on a owner occupied 2-4 units will require 3.5% down with a 580 credit score, most companies have an overlay mine is no exception our minimum score is 620. The downside of the FHA loan is Mortgage insurance for the life of the loan.

Freddie Mac Home Possible 2-4 unit fixed-rate is a minimum of 5% down with a minimum credit score of 660. The Home possible loan has a income cap of 80% of the area median income. According to Home Possible guidelines the borrower may only have ownership interest in in 2 financed residential properties including the subject property. The Home Possible will will require Mortgage insurance until there is 80% Loan-to-Value.

Both of these loans are owner occupied only if you are going non-owner occupied then I'd refer to @David Kelly for his matrix on the Fannie guidelines.

Best of Luck!

If you could get this done there are two that might be able to get it done as they do not specifically exclude manufactured homes on a HELOC they are PEN FED FCU and Quorum FCU. I would suggest calling them and talking them through what you have going on to see if they can help you out. If these two can't do it, it is unlikely you will be able to get it done anywhere else.

Best of Luck!

As far as I am aware FHA has score qualifiers for rate and down payment but not credit history requirements. This will be up to the underwriters to make judgement calls and would likely have homeowner education requirements for first time buyer/payment shock.

Best of Luck!

With about 20k a year and a house under 150k with 20% down would be roughly 20k-30k down if you could do that and have small to no debts, you should actually be able to qualify for a conventional loan which would be even preferential to a FHA as the FHA loan has Mortgage insurance for the life of the loan and a conventional loan does not. You could go to your local bank and try to qualify with them or if you'd like my company has some branches in NC that I can send you. The bank statement loan would generally be 2% above conventional.

Best of Luck!