Investment home

[pattycake]

I'm considering the purchase of a 2nd home to use as a rental property for family.  It seems like someone in my family is always in need of a place to live, and with the bargains out there on townhomes, I'm seriously thinking about taking the plunge. 

Do all lenders require 20% down for an investment home, or does that vary from lender to lender?  I'm thinking of going with PenFed or my local CU, but will likely wait about six months.  

[Anonymous]

they will likely require:

20% equity in first home

a decent down payment

ability to pay both mortgage without rental income.  In other words, you have to still fall within normal DTI ratios even with both mortgages.

[Uborrow-Upay]

mickie08, in your experience, would forming an LLC specifically for the purpose of investing in this property change any of that, assuming an adequate down payment?

[ShanetheMortgageMan]

20% to 25% down for a rental property, unless you go with Fannie Mae's HomePath program, which is where you can purchase eligible properties with only 10% down (for rental) and 3% down (for primary).  http://www.homepath.com/

[pattycake]

Do the homes have to be listed on the site, or can they just be homes owned by Fannie Mae? 

[ShanetheMortgageMan]

They have to be on that website.