Have you thought about buying a new home? Maybe buying a multi-family home? Fannie Mae has lowered the down payment required for 2-4 unit homes to 5%. This means if you buy a 2-4 unit home, you can collect rent from the other units to help cover your mortgage payment.
For those that have thought about buying a home but haven’t figured out how to save enough money and cover the monthly mortgage payment, this is an option. In the past you needed at least 15% down for a duplex and 25% down for a 3-4 unit home. Now if you live in one of the units, you can put as little as 5% down. What a great way to build equity and benefit from the entire property’s value.
FHA also allows you to buy a multi-unit home with as little as 3.5% down. However there is a mandatory FHA self-sufficiency test for those buying 3-4 unit homes. The rental income has to be enough to cover the entire mortgage payment including taxes and insurance. Fannie Mae doesn’t have this requirement. Plus with an FHA loan, the mortgage insurance doesn’t go away when you have enough equity. The only way to get rid of mortgage insurance on an FHA loan is to sell or refinance the home.
If you are thinking about buying a home and using rental income to help you qualify, this can be a great way to buy. Reach out to your loan officer and see how much you can qualify for, it may be more than you think!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
