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
04-17-2014 03:05 PM
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.