Does a duplex investment qualify for FHA? 02-26-2013

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Does a duplex investment qualify for FHA?

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Posted 02-26-2013, 03:37 PM

PRINTABLECOUPON

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Does a duplex investment qualify for FHA?

Found a nice duplex that is currently rented out and would like to buy .

Price is 139k
Gross rent 1800 ( without property management company)
Property tax annually 4k

The only thing that is stopping me is if FHA loan will be ok.

Both tenants are locked in thru 2013 one to middle of 2014 so I would not be able to occupy one side for entire 2013.

Putting about 50 to 60k down with closing costs.

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02-26-2013, 03:37 PM
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02-26-2013, 03:48 PM

Boomancini

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Quote from PRINTABLECOUPON

No. FHA is strictly for owner occupied transactions. With that down payment, why would you go FHA? Conventional would be a better avenue.

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02-26-2013, 03:51 PM

PRINTABLECOUPON Are Ya Feelin Lucky PUnk? Original Poster Member sinceMay 2004 Posts3,275 LocationFort Worth TX Reputation 302 Followers 0 + Give Rep	Credit is around 610-615 does not qualify for conventional at the moment.
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02-26-2013, 04:08 PM

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Where are you located, Texas?

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02-26-2013, 04:28 PM

BargainSnatcher

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I sent a quick email to my mortgage gal with details of your situation and score and this is the response i got back:

Unfortunately, FHA is for primary residency only. You can purchase a duplex and live in 1 unit, but if FHA finds out they don’t occupy in 60 days (and FHA is knocking on doors) they will get in big-time trouble. The only option is putting 20% down on a Conventional mortgage. We do finance properties with lower FICO’s, but I would have to look at the whole situation to be sure.

She also mentioned that rates are slightly higher for duplexes. She did my loan for my house and is going to do the loans on my investment properties and thinks i should get rates in the 4's for the investment properties with 20% down but i have good credit. I just thought i would mention it to show they are not one of these rip off companies.

Last edited by BargainSnatcher; 02-26-2013 at 04:31 PM..

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02-27-2013, 10:07 AM

MNGuy183 L3: Novice Member sinceAug 2011 Posts291 Reputation 85 Followers 1 + Give Rep	Even with a credit score in the 600's you should be able to get a conventional loan. Have you talked to a broker? Looking at a credit union might be a good way to go too, they sometimes can be more leniant.
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02-27-2013, 11:13 AM

Boomancini

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Quote from sikel12

I would definitely look toward a credit union or smaller bank. Most large banks aren't doing investment property loans right now.

This isn't true at all. Credit unions are actually the ones that shy away from investment properties. Usually you need a 620 for a conventional loan. What you need is to find a bank that portfolio their loans. Yes, credit unions may do this, but not with that credit and not on an investment property. Not sure where you live, but Washington Federal is a bank that holds their loans and have their own rules.

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02-27-2013, 04:11 PM

MNGuy183

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I live in MN and I had a much easier time and much better interest rate going with my credit union for an investment loan. They actually gave me the same rate they would give someone on a conventional mortgage (I had 20% down and made it 100% clear I was not living in the property and have other mortgages).

Moral of the story is check everywhere, things are different state to state, bank to bank, or even bank to broker. Even my broker who I've used many times and referred to many people told me he couldn't touch what my credit union was offering.

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Does a duplex investment qualify for FHA?