Are you going to live in it??
If so, you can buy a 2 to 4 unit property with just 3.5% down.
With FHA you can finance a 2, 3 or 4-plex residential property with just 3.5% down so long as you occupy one of the units. You get all the financial benefits of having roommates without having to pick up after them. And these days, who wouldnâ€™t like a little help with the mortgage? Tight financing guidelines combined with an unprece-dented number of families turned out of their homes by foreclosure has heated up the rental market.
The rental income of the property would be determined either by current rents (if itâ€™s rented already), signed rental agreements from new tenants or a schedule of rents from an appraiser who examines income property in the area and makes a determi-nation of what the subject property units should rent for. Underwriters allow you to count 75% of that income in your qualifying ratios. So, if you were to buy a 4-plex that rents for $2,000 per month per unit, you would get credit for 75% of the income for three units or $4,500 to offset your monthly mortgage on the property. Not bad!
Remember too, that FHA loan limits get considerably higher for multi-unit properties and typical loan limits in most areas are:
2 unit: $347,000
3 unit: $419,400
4 unit: $521,250
However, in some higher cost areas like Arlington County-Arlington, VA the limits are much higher (for now anyway):
2 unit: $934,200
3 unit: $1,129,250
4 unit: $1,403,400
In short this is a great way of making your next purchase a solid investment as well as a place to call home.
Elliott R. Oliva
Mortgage Banker| nmls#353884
Stearns Lending, Inc. | 202.681.1636
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