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How do I qualify for a loan on a 4 unit multi-family home?

I'd like to buy a 4-unit multi-family home to use as my primary residence as well as renting out the other 3 units.

I have excellent credit (770+) and enough for 10% down, but am not getting any quotes on the marketplace.  

Will this be classified as a primary residence or investment loan?  How much money down do I need to get a loan?  Anything else I'm missing?

Thank you for your advice!

Daniel
  • June 08 2010 - Washington
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Answers (5)

Dpabbot - I am with a community bank in Rockville MD.  4-unit properties are fairly straight forward.  The property appraisal will determine whether the property is acceptable - it needs to be "self sufficient."  ie: The net rental (as determined by the appraiser) needs to be able cover the monthly mortgage payment.
  • June 09 2010
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  • June 09 2010
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With a 10% down payment, your only option really is a FHA loan. Great option given the low rates. Your credit is excellent and buying this home as a primary residence will not be a problem. Highly suggest that you contact a local person that knows DC and understands this process.
  • June 09 2010
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Hi Daniel,
As long as you can qualify for the loan, you can absolutely buy a 4 plex as a primary residence if you intend to occupy one of the 4 units.

In an underwriters view they will inquire about the following:
your history of renting to others
post close liquidity
rental history in the area
your ability to pay back the loan in the case of vacancy
reasonableness of your continuing income on your current job

Your experience of managing rental units could mean that the bank would allow a lower Debt to Income, the amount of rental income credit, etc.  

Your best option is to apply for the loan and get preapproved. Once you have completed a full application the underwriters will tell you exactly what you will need to qualify.   
  • June 08 2010
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FHA is your best way to go and if you were in MA or NH we could get it done fast for you at a very good rate. It is considered a primary home and you do not need landlord experience to do an FHA loan with 3.5% down payment.
  • June 08 2010
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