All Forum Posts by: Torrell Palmason

Hey Matt,

So for starters Hard Money doesn't do Owner Occupied. If you took out Hard Money and did not Owner Occupy you could do the repairs and then once you refinance to conventional do the refinance as an owner occupied and then move in.

Another option albeit one I've seen be quite the pain of a process is the FHA 203k. With Credit at 580 or better the down payment will be 3.5%. This is a Owner Occupied loan so that will fit your situation however all repairs and renovations must be completed by a contractor and not the Owner. If you go this route I would suggest finding a lender who does these types of loans frequently as this a specialized loan and you do not want to be going through this process with someone who is new to this loan type. Also, this will work if both homes are on a single parcel not a parcel for each home as the second parcel wouldn't be considered Owner Occupied but an investment.

Best of Luck!

The Self-sufficiency rule is a FHA Rule so it will apply to all lenders doing a FHA 3-4 unit loan. This rule does not apply to a FHA 2 unit.

Best of Luck!

Another option HELOC for non owner occupied is max of 80% CLTV and can be done through Quorum FCU or PenFed FCU. Just to give you a couple of other options.

Best of Luck!

To simply put it, no you cannot do that. You can use your VA loan a second time depending on how much of your eligibility remains and there could be additional down payment if you go over your eligibility. However, VA is a owner occupied loan and you need to be living in the new home within 60 days of closing and must occupy it for a minimum of 1 year.

Best of Luck!

This will come down to preference and what you are wanting/willing to do.

If you use a HELOC on your primary then the HELOC payments will be used with the Debt-to-Income for the new investment. If you can handle the DTI hit and the payments on the HELOC then this is a great option as it keeps you with cash in hand and the HELOC can be used as a tax write off. However, if you can't handle the new HELOC payment combined with the new investment payment then cash is king.

On another note having the HELOC is a great investment in itself because you can draw on a standard HELOC for 10 years which will allow you to put a down payment on this investment and if you pay it back you can use it again on your next investment or to even to update the investment or the primary.

Best of Luck!

The only way to be able use a personal loan would be to have a secured loan so if you have a vehicle and you put it up as collateral with the bank. Also the new loan will be counted against your debt-to-income ratio so if you're already close it could send you over the threshold. When using a secured loan as help for a down payment you will need to factor in that generally at least some reserves are needed depending on the loan type you go with.

Best of Luck!

So first things first unless that Line of Credit is a secured Line of Credit it will not be usable for down payment or reserves. That being said 10k isn't as bad place to start.

Your options for the first when trying to start in REI generally will Be Conventional Affordable(Freddie Mac Home Possible or Fannie Mae Home Ready) or FHA. The Conventional Affordable for a 1 unit 3% down, 2 unit 15% down whereas FHA is 3.5% across the board. The FHA will have a lower payment as the rates are a little bit better however there is also Mortgage Insurance for the life of the loan while the conventional mortgage insurance can be removed at 20% equity. Also the Conventional Affordable has a Income limit depending on the area while FHA does not. There are pros and cons for each so it is solely dependent on your circumstances and preferences.

If you went ahead with FHA for the first REI you could use a Conventional Affordable for the second property. Once you have the second and wanted to keep pushing forward you could refinance your FHA and use FHA again. From there on out you should have enough funds to use Conventional. I say this is from the standpoint of a House Hack mentality as FHA and Conventional Affordable are owner occupied only so you'd need to live in the home purchased with those loans for a minimum of a year.

Best of Luck!

If you need a loan that won't take into account your income there are two that come to mind, Non-QM DSCR and Bank statement loans.

A Bank statement loan is used primarily for a self-employed and will require 12-24 months of business or personal bank statements. If it is personal bank statements then all deposits will be counted toward income whereas business bank statements will take only count 50% of deposits towards income. The disadvantages of this loan type is it will be a higher rate than a conventional, Minimum credit score allowed is a 660, 6 months of reserves, and a 80% max Loan-to-Value. These terms are based on what my company does and will vary from lender to lender.

On a DSCR loan, rents of subject property must be 100%-115% of the mortgage payment. The max LTV to value will be 85% and will require 6-12 months of reserves. The minimum Credit score is 660. Since this is a Non-QM it will have higher rates than a Conventional. There will be variations of the terms above based on program and lender however these are the terms set by the Non-QM DSCR 1-4 unit that my company uses.

Best of Luck!

Yes, I misspoke as we had just closed one with the non-occupying family. However if the partner can qualify on their own as the occupant you could go on title and you could have to work with your lender to word a Letter of Explanation for a gift to pay for down payment or closing costs and relate it to the guidelines as "close friend with a clearly defined and documented interest in the borrower"

They should be able to qualify on the 3-4 unit as they can count the rents which would help the debt ratio.

Best of Luck!

Why does this not qualify for FHA? From what you said it shouldn't have any issues.

FHA allows non-occupant co-borrowers. There is no income limit and the loan limit varies by county and by unit(1-4). The down payment is a standard 3.5%. The only thing you'd need to do is prove self-sufficiency which is the other 3 units will need to throw off rents to cover the mortgage.