Multi-Unit Property Owner (with FHA loan) seeking to purchase Single Family Home

Asked by Dn, Chicago, IL Thu Nov 29, 2012

I purchased a 4 flat in 2011 in Logan Square for around $600K with an FHA. I currently live in one of the units. My fiance and I are looking to purchase a single family home (likely in Oak Park) within the next two years. I am aware of the restrictions on getting a second FHA loan and I do not meet any of the exceptions nor will my current FHA loan be paid down enough to refi. So I have two questions:

1. Assuming my credit, income, etc. are satisfactory, what is the likelihood that I can get a non-FHA loan but put less than 20% down (more like 10)? I would rather keep the balance in my savings rather than put it all in up front.

2. Alternatively, how difficult is it to get a purchase/construction loan if we found a fixer-upper and hired a contractor to do the rehab? From my understanding, partial construction loans are difficult to get, especially nowadays. I'm wondering how my existing FHA loan would further complicate things. Let me know if additional detail would help. Thanks

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Joanna Weiss’ answer
Joanna Weiss, , Chicago, IL
Thu Dec 13, 2012
a 10% down payment is acceptable if you qualify for both loans. The income that is showing on the 2011 and 2012 federal income taxes will be used as well as your current incomes. You are correct. Rehab loans are difficult to get. Please contact me with any questions. Joanna Weiss
0 votes
Chicago Mort…, , Chicago, IL
Mon Dec 10, 2012
If you qualify with both properties, you should be fine. There are a few options available if you'd like to only put 10% down. Rehab loans are not quite easy to do, and most likely, you'd have to go the FHA route again, but you wouldn't be able to as FHA allows only one loan per borrower unless it's a work relocation.

If you'd like to talk further, please let me know. I can be reached at the info below.

Thank you,

JP Marzano
Senior Loan Officer
Chicago Financial Services
312-204-6556 - direct
312-608-1555 - mobile
0 votes
Seth Captain, Agent, Chicago, IL
Tue Dec 4, 2012
Wow, you paid 600k for a four flat in Logan Square last year...I hope that included butler service and granite parking slabs. Anyway, you should be ok.

As a buyer's agent, I work with a lot of owner occupants of multi-units in Chicago, especially near your 'hood. And sometimes they want a single family, or want to leave their multi-unit, usually due to a nagging wife, and go single family. Hey, it happened to me too....

So, you can buy a single family all day for 5% down. Fannie conventional. Or 10% or any other configuration you choose over that 5. As for the rehab loan, you're only option, that is easily obtainable, would be a Fannie Mae HomePath property offering a HomePath Renovation loan. They are great loans and are not FHA affiliated. So, here's what you do: just go to the Home Path website, look for properties with the HomePath Renovation logo (not all properties offer it) and bid away. Your Logan Square place will be a rental property, added to your debt to income ratio, but there are new requirements with this for landlords without longer rental history. A solid knowledgeable mortgage broker should help you around that.

Get yourself a good mortgage broker, a dedicated buyer's agent, and a decent real estate attorney. Rent out your unit and enjoy the end of the Green Line.
0 votes
Sergio De La…, , Chicago, IL
Thu Nov 29, 2012
Contact Edward Rivera he can help. 773-343-9200. He's the man.
0 votes
Matt Laricy, Agent, Chicago, IL
Thu Nov 29, 2012
I would call a lender, try Tony Lupescu at 708-351-6416.

The first part may be possible.

The second part I can bet it would be a no. These are impossible to get.
0 votes
Bill J Delig…, Agent, Naperville, IL
Thu Nov 29, 2012
#2 is difficult and a hassle

#1 sounds doable as long as you qualify for a 90% LTV loan w/ PMI.

Should you have any questions feel free to contact me.
0 votes
Brendan Ross, Agent, Chicago, IL
Thu Nov 29, 2012
I second that. Tracy is well-versed in matters such as this. I would highly recommend getting in touch with her.
0 votes
Manuel Brown, Agent, Chicago, IL
Thu Nov 29, 2012
Dear DN,

Contact Tracy Campagna with guaranteed Rate at 773-383-1405 or email her at She is great and she will explain to you step by step what you need to do reach your goal. Tracy is amazing!

I always say let the experts in lending explain the ins and outs of lending.

Best of Luck,

Manuel Brown, Broker
iMove Chicago
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