Owner Occupied/Multi-Family?

Comments(9)

• 
  RRIDL2119th February, 2004

  Hi John,
  Requirements vary from lender to lender but beleive me, I've checked with quite a few and one problem I ran into is finding a lender willing to accept less than %10 down on anything over 2 units. Yes , I know duplexes, and four-plexes are both multi-units but believe me, I've found that lenders view them very differently. I have a fico of 728 but still couldnt find a lender willing to finance me unless I had %10 down (yes owner-occupied). Now , 2 units are a different story. I had no problem getting 100% financing on 2 unit properties. Not to say you can't get 95% LTV OR 100% on anything over 2 units... i'm sure there's lenders out there but it will be a little more difficult. Find yourself a good mortgage broker. Good Luck!!
  Ryan

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  sKauGhTiEe19th February, 2004

  I know this is a tad different, but this 4 plex that i am purchasing is my first purchase so I am using FHA, owner occupied, they require a 3% down.. I have seller covering closing costs (6,000) and seller willing to gift back the extra 3% down that I will add on top of the purchase price. Once its gifted back, that is the 3 % down i am using.. So the only money i am using is the $500 that was attached to the contract. To get his attention..... I thought that was low to.. But he is willing to help me out, he owns a lot of property in California and knows that this is my first deal. <IMG SRC="images/forum/smilies/icon_smile.gif"> [ Edited by sKauGhTiEe on Date 02/19/2004 ]

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  RRIDL2120th February, 2004

  Hi sKauGhTiEe,
  You may have already done this, but I would check to make sure that you are allowed to use gifted money from the seller on an FHA deal. I know you can use it if gifted from family or friends but I don't know if they will accept if its from the seller. By the way, If you're a firstime buyer, FHA is definately the way to go. I went FHA and got into my first duplex for very little out of pocket. I actually got money back at closing! The money i did put down, I made back in rental income in the first 6 months.

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  rkgsx20th February, 2004

  One to four family homes can be financed via FHA loans. Non-government lenders use these guidelines as well, but are not always as flexible in terms of what you can put down.
  
  Anything beyond 4 units will typically require commercial financing and from what I've found they require even more be put down.
  
  So if you keep under 5 units, you should be able to find conventional financing and since it will be owner occupied, you should be able to get away with putting only 5% down.

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  JohnCl20th February, 2004

  Thanks for the advice everyone. Looks like in order to get to the 4 unit cap I might need to get an FHA insured loan. Can I do that even though it is not my first home?
  
  JohnCl

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  dirtman8920th February, 2004

  To use FHA you do not need to be a first time buyer. The property you are buying must be owner-occupied and you must be able to prove income. Remember you will also be able to use 75% of the rental income from 3 of the units to help you quilify. FHA does have pretty tight debt to income ratios.

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  sKauGhTiEe15th March, 2004

  That is true, very tight.... This is my first loan and it actually cashflows even with me occupying one unit and i still need to get a cosigner... Good Thing the father in law wants to help out....

• 
  Lufos15th March, 2004

  About 20 years ago I was bored and needed a project to fill my time. My life was at one of those level points when you really need a change. So I bought a big old semi destroyed house which was squating on an R-4 (Multiple Dwelling Lot).
  
  I moved in and filled my time from 5:30 PMt to about 3:00 AM in changing it into a four unit dwelling. I wanted to stay busy and that I did. Plumbing Electrical the whole works. I wanted it to look different, exciting, eclectic. That I did. My love of combat was fullfilled by fighting with the Building Inspector. But three months latter it was done. One biggy two bedroom two bath unit. and Three little one bedroom l bath units. Three with fireplaces. The biggy with a really great kitchen and the others with cute little kitchens that while functionable were really small. The gardens I left unplanned and very English. The pool area very Calif with a change room. Of course the garages were enough to handle all 5 cars.
  
  This had once been an elegant area of town but had changed. But the small little shops we had helped start began a comeback. A bit Gentrified. It became a fun place. Artistic persons from the studios. A teacher or two. It paid off. The value increased many many times over the sums invested. Of course I don't count my time put it down to therapy. It is hard to be depressed when you are creating something of function and beauty. This was it.
  
  I financed it all with a simple equity loan on other property. The bank were most pleased to refinance it all upon completion. I must say I had a finishing party. Catered and good. Banker, Mortgage Broker and masses of woodbe tenants. It worked well.
  
  Cheers Lucius

• 
  mjs887521st April, 2004

  I currently own a condo and am thinking of buying a multi-family house with my boyfriend. He has never owned a home before - would we qualify for FHA?
  
  Thanks!