Profile picture for dakota12345

can you buy a one unit condo/townhome in az for rental purposes w/5% down if you have excellent crdt

  • February 07 2011 - Phoenix
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Answers (9)

Please speak with a local lender, not real estate agents or Realtors.  I highly recommend Paul Volpe, V Pres of Nova Home Loans as I have had 20+ clients work with him, and all have been satisfied.

I am working on a Condo right now, very hard to get a loan on them in this market.  Please speak with a lender, and if you are considering purchasing one, please run the MLS by the lender as a lot of times they can tell you upfront if you will be able to get a loan on it.  Simply put, they are not as good of an investment as SFR & therefore, harder to get a loan on.

Best of luck.
  • February 08 2011
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Yes, you can absolutely buy an investment home with only 5% down.  You will be limited to purchasing certain foreclosures that are owned by the government but I just ran a search and there are over 50 homes/townhomes in the Phoenix metro area that would qualify for this loan program.   I am the listing agent for 3 of these properties and get assigned new listings from the government virtually everyday.  Let me know if you are interested and I will send you the current inventory list and set you up to receive automatic updates when new ones come on the market.  
  • February 08 2011
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It is highly unlikely that you can get 95% financing on an investment property - condo, townhouse or single family home.  However, there is money available for investment properties.  Lenders require (PMI) Property Mortgage Insurance for loans with less than 20% initial investment by the buyer and you cannot get PMI for investment properties.  Condos vs single family homes also may be more difficult since lenders have had tighter restrictions on condos recently.  If you find the lender be sure you check the rules and regs of the condo association.  Some have rules that you must own the property for at least one or two years before you can lease it out if you can lease it at all. 

  • February 08 2011
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You may want to check out investor properties on www.homepath.com and www.homestep.com. These are fannie mae and freddie mac property websites.

  • February 08 2011
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Speak to your realtor about VA owned properties.  VA offers what is called VA Vendee financing for investors: 5% down payment, no limit on the number of investment properties, and currently here in Virginia, my latest investor is obtaining 5% interest rate.  The Vendee loan is only available on VA owned properties, so inventory of homes available may be minimal.  Fantastic program for investors!  Other than that the only other investor loans out there seem to require 20% down, strict qualifying guidelines and naturally higher interest rate than owner occupied. 
Speak to your loan officer about maximum allowable seller concessions also.  Lending guidelines may only allow sellers to contribute up to 2% for a non-owner occupied home.  Good luck!
  • February 08 2011
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You might be able to go hard money but you'll have to refinance the mortgage within 12-18 months. If you're a first time investor with that much money, you should be looking into "options".
  • February 07 2011
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Dear Dakota:

Most investor loans from conventional lenders require a higher down payment. Talk to your lender to discuss your personal situation.

There are seller may carry properties, however they usually require a down payment also. Ask your Realtor to show you some of these properties.

May I wish you the best.

Jeff Masich
HomeSmart
Scottsdale
  • February 07 2011
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I would recommend that you consult with a local, reputable mortgage lender.  The lending industry has gotten incredibly complex and challenging, and each borrower's situation must be evaluated individually.  If you want or need the name of a quality lender, just email me from my Zillow profile.
  • February 07 2011
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Profile picture for Vicki Holmes

Buying a property for rental purposes would put you in the investor category. With all the recent changes in the mortgage arena, to my knowledge the minimum down payment for investors is 20% down on a conventional loan.

  • February 07 2011
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