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Financing in Gresham : Real Estate Advice

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  • Home Buying5
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Activity 4
Fri Apr 29, 2016
Dunesliders asked:
We are looking at a mobile home and 5 acres can refinance that with a VA loan?
0 votes 0 Answers Share Flag
Mon Dec 10, 2012
answered:
Like others have pointed out, FHA loans can be used for 1-4 unit properties. However when you are financing a 3 or 4 unit property, FHA requires the property to be self-sufficient AND the homebuyer must have 3 months of the proposed housing payment (Principal, Interest, Taxes, and Insurance, Mortgage Insurance, Homeowners Association Fees) in reserves (checking, savings, 401k, etc.) after closing.

What that "self-sufficient" part means is that the maximum mortgage payment for 3 and 4 unit properties is limited so that the ratio of the monthly mortgage payment divided by the monthly net
rental income does not exceed 100%. The appraiser will provide an addendum to the appraisal called a "rental survey". The rent from the rental survey of all units (even the one that is being occupied by your son), minus the appraiser’s estimate for vacancies or 15% (whichever is greater), must be at least how much the proposed housing payment would be. So hypothetically, if the rent from each unit is $1,000 and the appraiser's estimate for vacancy is 13%, then the 15% figure would be used, and the total net rental income would be $3,400/mo. The new housing payment could not be any higher than $3,400/mo.

In higher cost areas (Los Angeles, Boston, New York), that will sometimes create a larger down payment than FHA's required 3.5%... but in lower cost areas, such as Gresham, a 3.5% down payment should still be possible. It's all relative to the sales price & how much the market rents are.

Since FHA doesn't require someone to have previous landlord history in order to use rental income to qualify, if any of the other units are occupied with renters, then that rental income can be used to help your son qualify for a higher sales price than $150k (if he so desires).

If you'd like to discuss further questions I'd be happy to help.

Shane Milne | Lending in all 50 states | NMLS #81195
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0 votes 2 answers Share Flag
Sat Oct 8, 2011
answered:
Denny is 100% correct. Unless you want to put down 20%-30% ( or 10% down for FNMA Homepath REOs) for going non-owner, the best option would be have your fiance finance the other purchase in her name therefore requiring a minimum down payment versus a large down payment. Plus I always counsel with my borrowers to always try buy independently of one another if possible for several oblivious reasons but it just a good idea to insulate you from issues that could arise due to a future financial hardships or unfortunately a divorce.

Best of Luck!
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0 votes 9 answers Share Flag
Wed Oct 13, 2010
Aaron Heard answered:
Just to repeat what basically everybody else is saying. Work history is definately important but maintaining the same type of pay cycle is most important. Going from a salary paid position to a commission based career is a big "no no" in purchasing. I would highly recommend getting in touch with a Realtor who can direct you to their preferred Mortgage Banker/Broker to get you on the right track to obtaining home financing. but i would also do this quickly as the current interest rates are phenomenal!

Good Luck! and feel free to contact me if you would like to know who my preferred lenders are. I am more than happy to help.

Aaron Heard
503-752-7671
AaronHeard@JohnlScott.com
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