What is the average down payment banks will ask for in a multi family property sought as an investment?

Asked by Griss, San Diego, CA Sun Nov 14, 2010

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11
Gregorio Den…, , San Diego, CA
Fri Feb 11, 2011
It was good that you responded Rudi to set the record straight. We would not want people thinking you can get an FHA loan with 10% down on a multi-unit investment property.
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, ,
Fri Feb 11, 2011
Sorry. Overlooked the date. I usually don't respond on threads over a few days old.

Happy funding, Rudi
Web Reference:  http://www.umboc.com
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, ,
Fri Feb 11, 2011
1 to 4 units 25% and if you want rental income to help with your debt-to-income 30%. If you are referring to 5+ Multi-Family it will depend on how the property debt-services.
Web Reference:  http://www.umboc.com
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Helen Chong, Agent, San Jose, CA
Thu Feb 10, 2011
Hi Griss: purchasing a multi family 5+ units require an average of 30% down payment these days. As for <4 units, you can go as low as 10% on a FHA loan.
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, ,
Tue Nov 23, 2010
Hello Griss,
I work for the mortgage division of a local bank. We originate and fund loans for 1-4 unit properties with the clear intent of selling the loan on the secondary market just like most major mortgage companies and banks. While there can be some variances (such as FICO scores and minimum down payments) between us due to individual arrangements we have with the major purchasers of these loans, most of the guidelines we apply are the same.
Since you have asked regarding the down payment required for an "investment" I assume that you do not intend to occupy any of the units of this property as your own residence. Because the industry believes that "non-owner occupied" loans are riskier, the minimum down payment is higher that if it was going to be occupied by you. Generally, this means at least 25% will be the lowest down payment that we would require for a multi-unit property that has 2, 3 or 4 units. Single unit properties can be purchased with as little as 20% down (or as little as 15% down if secondary financing can be located). One large exception to these numbers are properties sold under Fannie Mae's Home Path program, which is one way that the Federal National Mortgage Association tries to market their repo'd properties. Since there are other rules that apply for investor purchasers like yourself, be sure to get thoroughly pre-qualified by a knowledgeable lender early in your search.
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Scott Godzyk, Agent, Manchester, NH
Mon Nov 15, 2010
You will get alot of different opinions as thre is a lot of different answers, the best way for you to proceed, is to get prequailified through a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any programs that you may quailify for to purchase and investment property. The variables ar whether you are living there, if it is 2-4 units or 5 plus units and what your credit is.

Please see my blog for info and advice on getting a mortgage in todays market.
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My NC Homes…, Agent, Chapel Hill, NC
Mon Nov 15, 2010
Loans for investment properties are difficult to get right now unless you have a minimum of two years of documented evidence that you have owned and managed rental property, in other words that you are an experienced property manager/landlord.

Typically 30% is required by banks for this type of "commercial loan" though I have heard of banks taking 25% as well.

Hope this answers your question and good luck.
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Sharon Rober…, Agent, Riverside, CA
Mon Nov 15, 2010
Cash offers on multi-family are accepted. I list properties for banks and have just sold two multi-family units. On both properties, I received a few cash offers. If you can get a credit line on your home, you may be able to arrange to pay cash.
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Dani-lynn Tr…, , Temecula, CA
Mon Nov 15, 2010
listen to the 2nd answer you got........HE is accurate:-) Dani
http://www.DIALdani.com
note:
at this point in the year, you can call me an Investor Specialist - nearly 80% of my annual business has been investors - I can get you assistance in your financing (not ME!) and hands-on assistance throught the process from selecting location to getting you a selection of tenants to choose from...NO FEE to buyer, ever! - REALTOR (951) 970-1615
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David Melend…, Agent, Riverside, CA
Sun Nov 14, 2010
Griss,
If you are buying a home under 4 units you may go down as low as 10% if your credit is good. Over 4 units they generally want 25% down. There are many factors involved. Call me and we can discuss what is best for you.
thanks,
David Melendez
951-757-1113
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Brenda Marti…, Agent, Riverside, CA
Sun Nov 14, 2010
Hi Griss. Most lenders have guidelines dictated by their investors who lend the money and they require 20% down for investment homes, some require more, it just depends on the investor guidelines and your FICO scores and assets. If you are buying as an owner occupied, many lenders don't mind what you bring in for a down payment, as long as it suits what you want, PMI or no PMI. I hope this helps. Good luck!
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