Multi-Family Non-Occupant Co-Borrower Guidelines

Gustan Cho Associates
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Multi-Family Non-Occupant Co-Borrower Guidelines

This BLOG On Multi-Family Non-Occupant Co-Borrower Guidelines On 2 To 4 Unit Properties Was PUBLISHED On May 24th, 2019

Multi-Family Mortgage Guidelines is different depending on the individual loan program. Multi-Family Non-Occupant Co-Borrower Guidelines is also different when adding non-occupant co-borrowers to a 2 to 4 unit home purchase:

  • Any two to four-unit properties is zoned residential can qualify for owner-occupant properties as long as one of the units is an owner occupant
  • One of the great advantages of buying a multi-family home is the owner can live in one of the units and rent out the remaining units
  • Down payment requirements vary depending on the loan program on Multi-Family Mortgage Loans

In this blog, we will discuss Multi-Family Mortgage and Multi-Family Non-Occupant Co-Borrower Guidelines on government and conventional loans.

Multi-Family Mortgage Guidelines On Owner-Occupant Homes

Multi-Family Mortgage Down Payment Guidelines on FHA Loans is 3.5%.

  • 2 to 4 unit home buyers who intend to live in one of the units as a primary residence can qualify to purchase a multi-family home with 3.5% down payment
  • Freddie Mac Home Possible mortgage program allows 2 to 4 unit home buyers to qualify with 5% down payment with conventional loans
  • Fannie Mae’s conventional guidelines require 15% down payment on 2 units and 25% on 2 to 4 units on conventional loans
  • Cash-out refinance mortgages are allowed on 2 to 4 unit properties
  • The maximum loan to value on 2 to 4 unit cash-out refinance mortgages is capped at 75% LTV
Multi-Family Non-Occupant Co-Borrower Guidelines
Gustan Cho Associates

Freddie Mac Guidelines On 2 To 4 Unit Homes

Freddie Mac Mortgage Guidelines on 2 to 4 unit conventional loans are the following:

  • 15% down payment on 2 units
  • 20% down payment on 3 to 4 units
  • The maximum loan to value on cash-out 2 to 4 multi-family mortgage is capped at 75%

Multi-Family Mortgage Guidelines On Investment Properties

Investment properties on Multi-Family Mortgage Loans have its own lending requirements when it comes to the down payment.

  • The loan-to-value requirement for Freddie Mac’s 2 to 4 unit investment homes are 75% LTV to finance with conventional loans
  • Multi-Family Properties require reserves
  • The amount of reserves depends on the type of multi-family unit as well as the loan program
Gustan Cho Associates
Gustan Cho Associates

Multi-Family Non-Occupant Co-Borrower Guidelines And Down Payment Requirements

To recap, HUD allows non-occupant co-borrowers. The down payment is 3.5% on single-family homes. The 3.5% down payment also includes adding non-occupant co-borrowers.

Alex Carlucci is a senior vice president with Gustan Cho Associates and an expert on multi-family financing. Here is what he has to say about multi-family non-occupant co-borrower guidelines:

To qualify for a 3.5% down payment FHA Loan on single-family homes, the non-occupant co-borrowers need to be related to the main borrower by blood, marriage, or law. Otherwise, FHA requires 25% down payment. However, on 2 to 4 unit multi-family homes, FHA requires 25% down payment if Non-occupant co-borrowers are added to purchase 2 to 4 unit homes. Fannie Mae requires 15% down payment on two to four unit homes if Non-occupant co-borrowers are added which is the same if one person purchases a two to four unit home. Freddie Mac HomePossible requires 5% down payment on two to four unit multi-family homes. If co-borrowers are added on Freddie Mac conventional loans, 15% down payment is required

However, 3% out of the 5% of the down payment needs to come from the main borrower.
Read more https://gustancho.com/non-occupant-co-borrower-guidelines

This BLOG On Multi-Family Non-Occupant Co-Borrower Guidelines Was PUBLISHED On May 24th, 2019

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