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I will like to buy my first home using fha. The first home will be a 4-plex. Is this possible?

How long would I be required The live in the rental before I can rent out all 4. I know it has to be owner occupied but how long is that duration requirement? Will the FHA downpayment still be 3.5%?I see a 4-plex in my area for 150k all 2bdrm/1bath plan on using FHA to acquire my first home/investment property save the for about 2 years then buy another rental investment using credit union conventional loan and then save both cashflow to buy my dream home. Hopefully if the #'s are right I can use rental payment to pay for my mortgages. I plan on having 6-months of mortgage save up in the event of vacancies . But since I will be living in one for about 1 year the other houses do not have to be occupied since I can afford the mortgage any rooms rented would = to cash flow (+- property taxes and insurance and repairs) by Itpara_706_286 from San Diego, California. Dec 24th 2012 Reply


Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,821 contributions

This is a great strategy. I have helped several young individuals/couples start their real estate empire doing just what you are doing. FHA requires that you take occupancy within 60 days and you must make it your residence (one of the units) for at least 12 months. Give me a call and we'll get your escrow closed quickly. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ Licensed in California and Arizona ~ NMLS 40586 ~ www.LoansA2z.com ~ 888-889-9950

Dec 25th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,588 contributions

Ok.. so in general, you can use FHA to purchase a 4plex.. And usually 3.5% would be the down payment.. However, since your purchasing it from a relative, then FHA has very specific rules in place.. The biggest is regarding the loan to value.. for "Non-Arms length" transactions, the maximum LTV is 85%... so you would need either 15% down payment or a minimum of 15% equity..The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Do not use the local "Big" bank, or one of those 50 states internet lenders or nationwide lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Dec 26th 2012
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Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 1,256 contributions

i have a excellent loan officer referral for you.. many years of experience. and she is right there in your area, email me at yourloanpartnerforlife@live.com or ohone me at 602 330 1598 linda

Dec 24th 2012
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Linda Miller (Linda Miller)
#2 ranked lender in Utah - 566 contributions

FHA is a great way to go to buy this property. You will need to live in one of the units for at least a year. Your best bet is to call a local mortgage professional in your area. I would contact Linda 123 and call her referral. Good luck and Merry Christmas!

Dec 24th 2012
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Meena Iskander (Miskander)
#0 ranked lender in California - 18 contributions

I am located here in Irvine, CA i am affilitated with many other direct lenders such as American Lending and GEM mortgage this loan is definitely doable with 3.5% down of course you have to be making Income, have bank statements to provide that you have reserves and also have a good FICO score, with that being said if you have any questions please feel free to contact me my direct number is 201-673-7205. Good Luck and Have a Merry Christmas

Dec 24th 2012
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Thank you so much for the quick instant replies. Wow this site rocks! I will contact the below folks when I'm ready. This buy will be from my grandparents who wants to relocate to a new country and wants me to buy the property to pay off the current balance and pass the home to me.

Dec 24th 2012
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,875 contributions

You must occupy the property for a minimum of 1-year on ANY loan in which you are using an owner occupied loan before you can turn it completely into a rental.

Dec 25th 2012
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,237 contributions

Because you are buying the home from your grandparents it may be possible to reduce the amount of downpayment you need by considering the difference between the purchase price and the current value as a "gift of equity" (assuming it is higher). A good mortgage lender will be able to walk you through this as an option, and additional reserves certainly would strengthen your application - plus allow you to preserve cash toward future purchases.

Dec 26th 2012
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This question is multi-faceted and will require a bit more time than just here for discussion. But just to clarify, if you are buying a place owner occupied with FHA financing, you must stay owner occupied for the duration of the mortgage. This is part of the contract that you will sign through escrow. The down payment will be for owner occupied properties and can be found at www.HUD.gov. Happy holidays and good luck.Andrew Alfonso

Dec 26th 2012
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Kevin Lane (Kevin Lane)
#114 ranked lender in California - 7 contributions

Yes, you can use an FHA loan to buy a 4 plex. It does make a difference , if the prtoeprties are alraedy under a lease. You will need to live in one unit. You can do over 80 % loan to value, but if you do, there will be private mortgage insurance up to 96.5 % LTV. FHA allows lower credit than conventional loans..... down to 640. Qualifying for the loan is the same as a single family home except for the other units. You woudl be well advised to set up your loan before looking for proeprty because then you will know the price that you qualify for. We'd be pleased to work through the figures for you.Call me at 760 208 2609 or email me Kevin@realty-answers.com

Dec 27th 2012
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Kevin Prince (KevinPrince)
#68 ranked lender in Pennsylvania - 26 contributions

This question is multi-faceted and will require a bit more time than just here for discussion. But just to clarify, if you are buying a place owner occupied with FHA financing, you must stay owner occupied for the duration of the mortgage. This is part of the contract that you will sign through escrow. The down payment will be for owner occupied properties and can be found at www.HUD.gov. I would recommend that you have a meeting with a loan officer that is a specialist in FHA here in San Diego. I am here in San Diego and have 30 years experience in the mortgage industry. I can be reached at 858-926-8904 or you can email me at kprince@liberty1amc.com. Merry Christmas! Kevin Prince SVP Liberty One

Dec 24th 2012
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