08-24-2013 04:07 AM
08-24-2013 10:05 AM
With conventional you'll be looking at a 20%+ down payment requirement on a 3-4 unit primary residence.
FHA can be as little as 3.5% down, however FHA has a self-sufficiency test that all 3-4 unit properties need to pass - For 3-4 units they must pass a self-sufficiency test, meaning the rent from a market rent analysis (form the appraiser does) of all units (even the occupied unit) minus the vacancy & maintenance factor (varies depending on what market the home is in, typically it's 15%), must be equal to or less than the monthly PITI payment on the home. So with 3.5% down if the total payment is $1,100/mo and the rent analysis show the total rental income is $1085, you'll need to put a little bit more in order for them to be inline. You also need to show 3 months PITI reserves for 3-4 unit properties with FHA financing.
Not knowing the area that this property is in, it's tough to estimate taxes/insurance, and not knowing what the other units would be renting for, it's tough to determine if your debt to income ratio would work out. However if at least 2 units are rented out at $500/mo then that should give you another $850/mo of rental income to qualify with, and you just may qualify for FHA.
If you add a co-borrower who occupies the property then your debt ratio should improve, if they don't occupy the property then their own expenses (namely housing, since they don't have any credit) will be factored into what you could qualify for.
08-24-2013 11:20 AM
08-24-2013 02:13 PM
You are welcome. At $750-800/mo of rental income it's likely the 3-4 unit would pass the self-sufficiency test with no more than a 3.5% down payment.
10-25-2013 03:10 AM