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Loan options for multifamily purchase in MA after bankruptcy

I am a MA resident and will be looking to buy my first home (owner occupied multifamily) in August. My chapter 7 bankruptcy will be 2 years discharged, and I have credit scores of around 685-700. My income is around 94K, I could potentially put 5-10% down (although the less the better) and I know I might be able to use projected rental income from the other units in the multifamily. My questions are....-Because of the bankruptcy, what loan options do I have?-What price range of house would I be eligible to buy (ballpark), I know it depends on whether 2, 3 or 4 family.Thank you!! by krice_170_759 from Boston, Massachusetts. Jul 1st 2013 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

FHA says 2 years after a BK.. and FHA requires 3.5% down.. if your purchasing multi family, then you would have to live in one of the units and the property cannot be over 4 units.. most lenders will price 1-2 units lower than 3-4 units, and the lender could require more $$ down than the minimum.. Also, since you have no landlord experience, its unlikely any lender will give you a credit for potential rental income. you would have to qualify for the full payment as if there were no income.. You also might get some grief since your 2 years out of a BK, never owned a home before, and your jumping into multi family. realistically, if you want to know for sure, you need to ditch the whole "Internet Thing".. and pick up the phone and talk to a real person... 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

Jul 1st 2013
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Ernesto Marez (Ernesto)
#68 ranked lender in Maryland - 137 contributions

hello, best bet for purchasing a multi-family property & get rental income credit , is an FHA loan with only 3.5% down. feel free to email me directlyErnesto Marezemarez@oldlinebank.com240-544-1243

Jul 1st 2013
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

FHA will allow up to a 4-unit so long as you live in the property. You'll only need 3.5% down.

Jul 1st 2013
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James Mazzola (Mazzola)
#110 ranked lender in New Jersey - 313 contributions

FHA will allow up to a 4-unit so long as you live in the property. You'll only need 3.5% down.

Jul 1st 2013
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Steven Cook (stcookmortgage@gmail.com)
#38 ranked lender in Washington - 256 contributions

The big items to be aware of: with FHA you will need to live in one of the units; and if you put less than 10% down, you will be having to pay PMI for the entire time you have the FHA loan; and the PMI will be counted along with Principal, Interest, Insurance and taxes, and your other regular paymentsto determine you Debt to Income (DTI) level, which should probably be under 45% (better if under 36%). Since you have not previously been a landlord, it is unlikely you will get to count any of the income from the other units toward meeting that DTI limit. Once you have been doing it a coupleyears, that will change. There are also different amounts one can get loans for from FHA, depending on how may units are in the property. Your bestinformation will be available by talking to a local, Licensed mortgage professional.

Jul 1st 2013
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

FHA 3.5% down, live in one of the units. The income from the other units will be based on 75% of the projected income (or existing income, from seller's 1040 Schedule E, if available). With 4 units, your housing cost could be very low, or even zero.

Jul 1st 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

After 2 full years your only option is FHA with a minimum of 3.5% down. What you qualify for also will depend on what other current debt you have. Also as you already stated how many units you want will also play a roll in what you qualify for.Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation ask for Michelle or Benny. We will find the Best Mortgage Option to suit your needs! Check us out at www.BestMortgageOption.comAsk us about the awesome discounts we offer heroes as a Homes for Heroes affiliate!

Jul 1st 2013
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

FHA says 2 years after a BK.. and FHA requires 3.5% down.. if your purchasing multi family, then you would have to live in one of the units and the property cannot be over 4 units.. most lenders will price 1-2 units lower than 3-4 units, and the lender could require more $$ down than the minimum.. Also, since you have no landlord experience, its unlikely any lender will give you a credit for potential rental income. you would have to qualify for the full payment as if there were no income.. You also might get some grief since your 2 years out of a BK, never owned a home before, and your jumping into multi family. realistically, if you want to know for sure, you need to ditch the whole "Internet Thing".. and pick up the phone and talk to a real person... 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

Jul 1st 2013
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

FHA says 2 years after a BK.. and FHA requires 3.5% down.. if your purchasing multi family, then you would have to live in one of the units and the property cannot be over 4 units.. most lenders will price 1-2 units lower than 3-4 units, and the lender could require more $$ down than the minimum.. Also, since you have no landlord experience, its unlikely any lender will give you a credit for potential rental income. you would have to qualify for the full payment as if there were no income.. You also might get some grief since your 2 years out of a BK, never owned a home before, and your jumping into multi family. realistically, if you want to know for sure, you need to ditch the whole "Internet Thing".. and pick up the phone and talk to a real person... 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

Jul 1st 2013
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