Multi-Unit Homes: Multi-Unit Homes Mortgage Loans

Multi-unit homes are two to four unit residential homes.  Owner occupied multi-unit homes are where the owner lives in one unit and the rest of the unit is rented out for rental income.  There are two types of multi-unit homes mortgage loans:  FHA multi-unit homes mortgage loans, and Conventional multi-unit homes mortgage loans.

Financing Multi-Unit Homes: FHA Financing

Home buyers can purchase multi-unit properties through FHA insured mortgage loans.  Multi-unit properties are two to four units.   Multi-unit homes can be purchased through FHA loans and the minimum down payment required is 3.5% down payment.   The owner of the multi-unit home needs to occupy one of the units for at least one year from the closing date and can rent out the remaining units.  Rental income of the rental units can be used to qualify for multi-unit property financing.  However, only 85%, sometimes 75%, of the market rental income can be used for qualifying income towards the borrower’s debt to income ratios.  Multi-unit homes are an excellent way to offset the home buyer’s income due to the additional rental income.  If the home buyer plays their cards right, they can live mortgage free if they get enough rental income to offset their monthly mortgage and building expenses.

Financing Multi-Unit Homes: Conventional Financing

To purchase multi-unit properties via the conventional loan route, the multi-unit home buyer needs a minimum of 15% down payment unlike FHA multi-unit home mortgage lending guidelines of 3.5% down payment.  As with the FHA multi-unit mortgage lending program, an owner occupied multi-unit mortgage loan borrower needs to occupy one of the units as their primary residence for a period of at least one year.  Conventional loan multi-unit home buyers can also use 85% of the market rate rental income for the rental units in qualifying for their conventional multi-unit mortgage loan.

Rates And Terms Of Multi-Unit Homes

Mortgage rates on multi-unit properties are slightly higher than single family homes.  Mortgage lenders may also require reserves and higher credit scores for multi-unit properties mortgage loan borrowers.  If you are interested in qualifying for multi-unit property financing in Illinois, Florida, California, Wisconsin, or Indiana, please contact me at 262-716-8151 or visit me at www.gustancho.com .  I offer multi-unit property mortgage loans with no mortgage lender overlays in Illinois, Florida, California, Wisconsin, and Indiana.  Your DU FINDINGS or LP FINDINGS per the Automated Underwriting System is your official mortgage loan approval.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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