House Hack your heart away ☺
I am so excited about this product, and this will help so many people in states like California do a HOUSE HACK! I have been wondering, waiting, and hoping for a product like this because the only other products we have that have a 0 or low down payment are VA/FHA. Not everyone can qualify for the VA loan and the FHA loan requires you to pass a self-sufficiency test to qualify. That means the property, using 75% market gross rents on all units must be more than the PITIMI payment. In states like California, it is pretty much impossible. NOT ANYMORE!!
This change will take place on November 18th and allow for clients buying a 2-4 unit owner-occupied property only to put 5% down.
- 5% down on 2-4 units.
- Down payment can be a gift from family.
- No income limits.
- No self-sufficiency test.
- No first-time buyer requirement.
- Minimum credit score: 620+ and must also pass through an automated underwriting system.
- Reserve requirement: Based on automated underwriting findings.
- Maximum Debt to income ratio: Based on automated underwriting findings (expecting this to be 45%-50%).
- If self-employed can qualify with 1 one-year tax return if you have been self-employed for 5 years ( must get AUS approval on this.)
- Loan limits in California for example.
- 2-unit = $1,394,775
- 3-unit = $1,685,850
- 4-unit = $2,095,200
Clients can now also refinance on a conventional mortgage of a 2-4 unit with only 5% equity. This is a great solution for anyone looking to refinance out of an FHA mortgage, private money loan, or a loan with bad terms.
Definition of limited cash-out refinance by Fannie Mae:
The client is not required to take any cash out but the maximum they can take out is the lessor of 1% of the loan amount or $2,000.
Accessory Dwelling Units:
Fannie Mae does not currently allow for the use of ADUs on 2-4 units. We do have workarounds for this and you can reach out to me directly if you have a property that has an ADU for guidance.
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