New Fannie Mae 5% Down for 2-4 Unit Multi-Family Homes
What is Considered a Multi-Family Home?
A multi-family home is a single building that’s divided to accommodate separate living quarters. Examples include duplexes and townhomes as the most common property types. They can range from a duplex or triplex, which has 2-3 dwellings within a single building, to homes with up to 4 units called quadplexes. Buildings with more than 4+ units are typically considered commercial properties and are not applicable for the 5% Down Payment Fannie Mae loan program.
The Basics to Qualify:
1. You must live in 1 of the units as Owner Occupied
2. Minimum Credit Score 620
3. Minimum Down Payment of 5% based on the Purchase Price
4. Anything less than a 20% Down Payment will require private mortgage insurance (PMI)
5. Loan reserves 6 months of the principal and interest payment, taxes, insurance, any hoa
Loan Amounts:
The maximum loan amounts will vary depending on the amount of units which can range from 2 duplexes, 3 triplexes, and 4 quadplexes.
- 2-unit homes: Maximum loan of $929,850
- 3-unit homes: Maximum loan of $1,123,900
- 4-unit homes: Maximum loan of $1,396,800
Benefits of a Multi-Family Purchase:
Build Wealth
You have a huge opportunity to purchase a multi-family home with updated guidelines
5% Down Payment
This is a dream scenario for the amount of properties you can buy
Entry-Level Investing as a 1st Time Home Buyer
Buy a primary and create rentals at the same time – this is an amazing product with a huge investment upside
Act Now
Properties that have had difficulty getting approved in the past now offer an opportunity for others to purchase
Increased Property Value
Your value will increase! Now with more financing available for these properties, more demand is coming
Have Family Live Close By
With expanded families or taking care of older generations, this is a great option
Fannie Mae goes on to say “First, we are increasing the maximum allowable Loan-to-Value (LTV), Combined LTV (CLTV), and Home-equity combined LTV (HCLTV) ratios for 2-4-unit principal residence properties. These changes aim to support the revitalization of the “missing middle” housing sector, enable better access to mortgage finance for historically underserved borrowers, and help provide affordable rental housing for low-and-moderate income renters.” https://singlefamily.fanniemae.com/media/37106/display
Change in Future Mortgage Lending is here
With the reduced down payment requirement to 5% for multi-family homes (old guidelines of 15%-25% down payment) now make it easier for more purchasing homeowners to immediately become landlords. Fannie Mae is making multi-family home purchases a more attractive part of the market to expand business for all. This creates a huge opportunity in this market that has been forgotten. We will see a dramatic increase in this market starting in 2024 and years to come. Generational wealth will be created by new and younger investors and provide a great income opportunity for all.
Buy a Home and Become a Landlord
With the cost of home values soaring in many areas across Texas, the cost of homeownership is increasingly forcing many to continue to rent for years to come. Purchasing a multi-family primary residence makes sense. Whether you’re renting out 2-3 of the other units you will be creating security and building wealth. Investors and Developers along with Builders will see this as a huge opportunity to expand this market. It’s a great alternative to apartment renting for those looking for more privacy. So there is a great marketing side to this to capture your future renters. We’re here to help explain the options work with the Best Texas Mortgage Broker. You’ll enjoy our award-winning service!
For more information on our Fannie Mae 5% Down for 2-4 Unit Multi-Family Homes, their benefits, loan options, and how it may apply to you, please contact us directly at 281-627-4222 or submit the “Quick Quote” form on this page.
