Financing in Philadelphia>Question Details

jdinapoli, Home Buyer in Philadelphia, PA

I want to purchase a 5-unit bldg and convert to 4 units. It would be my primary residence. Can I get an FHA loan?

Asked by jdinapoli, Philadelphia, PA Sat Aug 17, 2013

I understand that FHA loans are available for up to 4-unit properties. I have seen online, however, that it is possible to get FHA for a 5-unit property if you are converting it to a 3- or 4-unit. Would like to know if this is the case. Thanks.

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10
Mr. Costello is absolutely correct.
1 vote Thank Flag Link Mon Aug 19, 2013
There is in fact an FHA mortgage option for purchasing a 5 unit building and converting to 4 units. It is the 203k. I can assure you that this informtion is correct.

The 203k renovation loan may be perfect for you in this situation as you will be able to finance the cost of the conversion and keep more money in your pocket. The loan limit ceiling will be $807,700.

You will want to make sure that you are acquiring the property at a good price for the work that you will be putting into it. Ensure that the after improved value of the home will be more than your purchase price plus cost of renovations. In this case, your loan limit will be the 110% of the after improved (4 unit) value of the property minus your mandatory 3.5% down payment.

Wes Costello
AnnieMac Home Mortgage
203k Specialist
http://www.203kPhiladelphia.com
215-690-1038
1 vote Thank Flag Link Mon Aug 19, 2013
As long the zoning of this property does not change, this can be done with a FHA loan.
1 vote Thank Flag Link Sun Aug 18, 2013
BTW it wouldn't even be possible with a 203(k) because this program doesn't allow conversions.

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
1 vote Thank Flag Link Sat Aug 17, 2013
This may be possible with a FHA 203k loan. It would have to end up being your primary residence. If you like to contact me we have a department dedicated to 203k loans both full and the streamline version

Joe Cafiero
Guaranteed Rate
email: joe.cafiero@guaranteedrate.com
cell: 914 456-0677
547 Pottstown Pike
Chester Springs, PA 19425
1 vote Thank Flag Link Sat Aug 17, 2013
Yes but only if there is a way to make it a 4 unit before closing or do an FHA 203k.

We do them. Call me Monday, 267-514-4630 x201 and I can go over details.
1 vote Thank Flag Link Sat Aug 17, 2013
Hi J. DiNapoli,

Javier gave you the best answer. There is no FHA mortgage available for a 5-unit building. Since it is currently a 5 unit building, it could not be purchased with an FHA loan.

If the current owner would be willing to perform the necessary steps and renovations to convert the property to a triplex or quadplex, then you could possibly purchase it as a primary residence with an FHA loan.

I don't think a Seller would spend his/her money to do that unless there were no other buyers for the property and, even then, does the Seller have the money and desire to go through all that before settlement? It may be too complicated and risky for the Seller.

There are many duplexes, triplexes, and quads available for sale in the Philadelphia area that may meet your objectives. I had great success finding and negotiating good multi-family property purchases for my clients. I'd be happy to sit down with you and speak with you about working together to achieve your goals. Please feel free to call me to schedule a time we can get together and talk.

Have a great day. Looking forward to hearing from you soon.

All the best,
Larry Lichtman, CNE
Realtor, Property Manager
Your Real Estate Resource For Life
CELL/Text: (267) 254-7994

Liberty Real Estate Associates
924 Arch Street
Philadelphia, PA 19107
Office: (215) 625-4725
0 votes Thank Flag Link Sun Aug 18, 2013
Javier
The truth is highly under rated. But it is refreshing. Thsnkyou
0 votes Thank Flag Link Sat Aug 17, 2013
Good evening;
The answer to your question is two-fold.You can use FHA financing for an owner-occupied building but the building maximum amount of units is 4.With a 5 unit you would need to use conventional financing with 25-30% downpayment.FHA financing is 3.5% downpayment.With these facts,you may want to purchase a 4 unit convert to a 3 unit and rent out the other 2 units.
To discuss further please contact me at 267-716-8228 or email-realtor94@gmail.com
Don Sherman
Century21 Advantage Gold
Cellphone-267-716-8228
Email-realtor94@gmail.com
0 votes Thank Flag Link Sat Aug 17, 2013
From the time you apply for your mortgage and you close on the house, if that property is a 5 unit, you will not be able to do an FHA loan. Any funding of properties 5 or more units, it'll automatically be a commercial loan.

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
0 votes Thank Flag Link Sat Aug 17, 2013
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