I don't handle FHA deals....but I have a question:

Since it's impossible to obtain MI for a conventional purchase of an owner-occ 4 plex, will FHA do the loan with 10% down? 

$500K purchase price in CA.

Thanks experts.

JB

Justin Bayle:

I don't handle FHA deals....but I have a question:

 

Since it's impossible to obtain MI for a conventional purchase of an owner-occ 4 plex, will FHA do the loan with 10% down? 

$500K purchase price in CA.

Thanks experts.

JB

yes you can, but there are a few requirements on a 3 or 4 unit.

1.  Must have at least 3 moths PITI in reserves

2.  The rent or if not rented the projected rents based on 75% of rent added together must be equal to or exceed the mortgage payment.

Thanks Mark.  I assume you are referring to the rents of just the 3 units that will not be owner-occ? Or do you count the projected rent of the owner-occ unit as well?
 

Net rental income is the appraiser's estimate of fair market rent from all units (including the unit chosen by the applicant for occupancy), less a 25% allowance for vacancies and maintenance.

Also rates are great, I checked Flagstar a minute ago and Par is at 5.250 FHA 30 year fixed

Mark, your help is much appreciated!

Who doesn't love this new place?? !!  Yeah Matty and Glenn all the others making it happen.

The reason for the second requirement, having the rents for all 3 or all 4 units carry the PITI, is the assumption that the homeowner will eventually move out of the home.  If the property cannot carry itself, the chance for default is greater.

MisterVA:

The reason for the second requirement, having the rents for all 3 or all 4 units carry the PITI, is the assumption that the homeowner will eventually move out of the home.  If the property cannot carry itself, the chance for default is greater.

Good point Paul

Justin Bayle:

Who doesn't love this new place?? !!  Yeah Matty and Glenn all the others making it happen.

And don't forget about how everyone is willing to help versus just trying to steal the deal!

They also require a comparable rent

analysis

to be done with the appraisal and you go by 75% of what the CRA says...

Doesn't the comparable rent analysis automatically come with a multiple unit appraisal?  As well operating income statement?

Here in Cali, yes... I dont know about the rest of the world though.