When they do that, they have the ability to sway from normal Fannie Mae and Freddie Mac requirements which require a certain number of years of employment and a multitude of other items. 

Here are your options in order of what will give you the best terms. 1) Fannie Mae cash out refinance to 75% on a single family residence or 70% on 2-4 units.

That way you can qualify for either FHA 3.5% down or Fannie Mae 5% down and once completed you can occupy one unit and rent out the other units. 

Havan,I have never heard of that are you sure it was not Fannie Mae 5% down for a 2-4 Unit multifamily? 

Hi Molly,Since, you are merely using one loan to pay off another, it doesn't seem like an efficient use of capital (especially if the loan you are paying for the primary has low rates).

I was looking on the product matrix for the Fannie Mae Homestyle loan and it says that they accept Community seconds for down payment.

If you are self employed, FHA can still work with a 12 month average, and Fannie Mae and Freddie Mac will also allow a 12 month average in certain cases. 

Also, just two days ago Fannie Mae made it possible to buy a 2-4 unit property as a primary residence with just 5% down.

The software nerd 5 levels up is the one who does the bulk data entry saying "if it's 2-4 unit, here's this hit, and if it's cash out, here's the hit for that," and so on.If, at the Fannie Mae level, some hit goes away, but "Johnny consumer" does not notice it, and they can leave it in there, and take that extra profit, I'm sure you can see why they might have an incentive to do that.

This is most common with GSE products like Freddie Mac and Fannie Mae.