Yes! This is a great strategy to start building your portfolio of multi family properties! Make sure you’re aggressively paying down the mortgage to get a better payment when you refinance.
Wow this is great content! I feel like everybody else just repeats the same stuff in regards to taking out an FHA loan. This was so refreshing! Keep it up bro!
Please do a video on the self sufficency test for fha multifamily properties. And I'm curious as to how fha uses this in conjuction with the buyers current income.
I have a 4-plex property in LA with an FHA loan purchased last October. My primary income is from my company that is currently located in LA. If I move my company to San Diego, set up an office in San Diego, maybe even establish relationships with businesses in San Diego to supply my company with product... Will this qualify me to use FHA to buy a 2nd property less than a year after I bought my first FHA property? First property has less than 10% equity, but is paying for itself with rental income, so my DTI will be in an optimal range. The goal is to buy a 2nd multi-unit as soon as humanly possibly while utilizing FHA's low down payment. Will relocating my own company of 10 years (which is incorporated, but still a sole-proprietorship), which operates primarily online but utilizes local suppliers, will such a relocation be viewed as an acceptable reason to utilize a 2nd FHA within less than a year? Or, would refinancing out of FHA loan allow me to buy a second property utilizing FHA within less than a year?
Hey DJ! FHA requires you to physically occupy the home as your primary residence for the first 12 months after purchase. If you are only receiving mail there and your actual home is elsewhere that would be considered mortgage fraud and would be cause for the entire balance to be called due.
If you see this quick question, when buying multi family with an FHA do I need to have reserves in my account when I go under contract or can I save during that period and show the reserves at closing?
Great video, Caton. How do you keep up to date on new changes? Are you part of any MLO or similar organizations? I am just getting into the industry on the East coast.
Thanks so much! I’m an owner at a mortgage bank so that helps me stay ahead of the curve a bit but I highly recommend HousingWire one of the best if not the best news source in our industry!
it can definitely be helpful but remember they will not just be co-signers but co-owners as well. anyone on the loan for FHA must also be a Title holder.
@@Jynn.33 feel free to look it up but anyone on the loan used to qualify must be on title. FHA allows for non occupant co-signers but they will be on title.
Canton! I need some help here. Looking in my state Rhode Island and I'm not finding much information on how to approach even getting a FHA first time home buyer load program. Please advise ?
Hi! I'm not licensed in RI but I recommend checkign out www.rihousing.com/ it's your state's Housing Finance Agency. Looks like they offer some solid programs for first time buyers!
Does the fha loan allow for someone to be on the deed that is not on the loan? For instance if I partner with someone and the put the down payment money up and I get the loan soley in my name. Can the deed be recorded in both of our names. Looking to purchase a 4plex. Thanks for the info.
Anyone on the loan must also be on the deed, so unfortunately anyone not on the loan cannot be on the deed. You can talk to a Title attorney about how to add them later on however.
So we are thinking of maybe buying next year because the realtor told us, it's so competitive but I'm worried the mortgage rate will go up. What's the current apr today and what do you think will be in the future...same or more?
Rates are still HILARIOUSLY low in comparison to where they were just two years ago. Conventional rates still in the low 3's and FHA/VA in the mid to high 2's. In 2018 they were closing in on the 4's. I think rates wil trend higher moving into 2022 and beyond but these things go in cycles. Wish i had a magic ball, but remember that you should buy when RATES are low, not when home values are low because you'll be building equity faster and paying less interest
Hey I’ve been living in my fha loan home for one year now!! i plan to move out soon and rent out my house. Is it possible to transfer the deed to an LLC before I rent it out? I don’t necessarily want to refinance because I already have a low interest rate..
great question! if you plan on using your FHA loan again I'd recommend you refinance to a conventional loan to free that up. If not, there's still plenty of great conventional loan options available to you! In regards to transferring the deed to an LLC I'd recommend speaking with a local Real Estate Title expert to help you with doing that!
I need help with mine every time I try to they just run my credit bringing it down saying I can’t get a fha loan with a 580 now I have 607 and 630 what can I do with little down
So I highly doubt I'll get a response but I do have a question. I am in the middle of the process with a 630 FICO buying a house from family that I am currently living in. The mortgage company it wanting rent verification claiming that it is a FHA requirement. Gift of equity letter covering the down payment closing costs of the loan. The mortgage company is claiming that without the rental verification fha will only allow the loan to be 85 percent of appraisal value. And because I cannot provide a rental history we are now waiting on the appraisal. I have been living in house rent-free just covering the bill while it was in probate. Does this sound right?
Response granted! So t his falls under what's called an identity of interest transaction, meaning a sale between parties with family or business relationships. These kinds of sales have a hard limit of 85% Loan to Value, or in otherwords a 15% down minimum. However, there are exceptions. One of them which would apply to you is a Tenant Purchase. The EXACT FHA Guideline that you should share with your lender is the following: A current tenant, including a family member tenant, purchases the property where he/she has rented for at least six months immediately predating the sales contract. *Note: A lease or other written evidence to verify occupancy is required.* The maximum mortgage calculation is not affected by a sales transaction between a tenantand a landlord with no identity-of-interest relationship. Your issue is since you lived rent-free, there's no lease to designate you as the actual tenant of the property for the last 6 months.
@@CatonDelRosario first of all I would like to say thank you very much for your very detailed response. I am understanding correctly that rent is not the issue it is simply that the lease says that I live there rent-free?
I don’t think it’s a matter of being rent free, but I think there needs to be a formal lease agreement that was executed at least 6 months prior to your sales contract
@@CatonDelRosario there is a contract in place. And I have lived there paying the bills since March. That is what the contract requires. As stated in the contract the estate will allow the tenant to occupy the property rent free as long as electric and water are kept up to date
I would say you’d probably need to then provide verification of those utilities being paid from the start of that lease til now and then a letter of explanation from you stating that and a letter from your landlord to verify the same. I’m not an underwriter but in my opinion that would satisfy the guideline
I've had quite a number of FHA buyers get accepted recently. I think the market is slowing down a little and it does take a good combination of agent and LO to show why an FHA loan isn't the boogey man that most sellers think it is, especially if the property is in great condition, they pull from the same appraiser pool as conventional loans. We're closing them just as fast and easy as conventional anyways, it really largely depends on how well the lender prepped the file before sending offers out.
Usually about 6-12 months at the soonest, though right now rates are up in a big way so might actually not benefit you to refinance into a conventional loan
One issue is that you might not qualify for a 203k loan based of your debt to income ratio. Another way around it would be to do a seller/buyer funded escrow with your lender.
Did you learn something new about FHA Loans?
Great content! So conversational! Thank you! @RealAssistant_
@@RealAssistant_ thanks so much for watching!
Thank you for watching! Anything you’d like me to make a video on?
Can you refinance to a conventional loan and use FHA loan to buy a second multi family owner occupant?? 💯💪🏾💪🏾
Yes! This is a great strategy to start building your portfolio of multi family properties! Make sure you’re aggressively paying down the mortgage to get a better payment when you refinance.
Wow this is great content! I feel like everybody else just repeats the same stuff in regards to taking out an FHA loan. This was so refreshing! Keep it up bro!
Wow I can't believe your channel hasn't blown up yet! Great content.
Thank you so much! Anything you’d like me to make a video on?
Please do a video on the self sufficency test for fha multifamily properties. And I'm curious as to how fha uses this in conjuction with the buyers current income.
Noted! I’ll get to work on it
this is a lot of great info! ty!
You’re welcome!
I have a 4-plex property in LA with an FHA loan purchased last October. My primary income is from my company that is currently located in LA. If I move my company to San Diego, set up an office in San Diego, maybe even establish relationships with businesses in San Diego to supply my company with product... Will this qualify me to use FHA to buy a 2nd property less than a year after I bought my first FHA property? First property has less than 10% equity, but is paying for itself with rental income, so my DTI will be in an optimal range. The goal is to buy a 2nd multi-unit as soon as humanly possibly while utilizing FHA's low down payment. Will relocating my own company of 10 years (which is incorporated, but still a sole-proprietorship), which operates primarily online but utilizes local suppliers, will such a relocation be viewed as an acceptable reason to utilize a 2nd FHA within less than a year? Or, would refinancing out of FHA loan allow me to buy a second property utilizing FHA within less than a year?
Question: Do I need to “LIVE!” there, or do I just need mail going to the property?
Hey DJ! FHA requires you to physically occupy the home as your primary residence for the first 12 months after purchase. If you are only receiving mail there and your actual home is elsewhere that would be considered mortgage fraud and would be cause for the entire balance to be called due.
If you see this quick question, when buying multi family with an FHA do I need to have reserves in my account when I go under contract or can I save during that period and show the reserves at closing?
You’ll need the reserves to be shown during the underwriting process. It can be in any liquid account even things like 401k or IRA
Thank you for the content ❤🙏🏿
You’re welcome! Any topics you’d like me to cover in a future video?
Very informative, thanks!
You’re so welcome!
Great video, Caton. How do you keep up to date on new changes? Are you part of any MLO or similar organizations? I am just getting into the industry on the East coast.
Thanks so much! I’m an owner at a mortgage bank so that helps me stay ahead of the curve a bit but I highly recommend HousingWire one of the best if not the best news source in our industry!
Can I co-sign an fha loan with my mom even tho I already have an fha loan under my own name ?
Does the FHA have an official checklist or guidelines for their appraisal requirements ?
Not that I'm necessarily aware of but they have their entire guidelines published.
Would you recommend have 2 co signers on an FHA loan to increase income. Looking for a multi family and co signers would move in
it can definitely be helpful but remember they will not just be co-signers but co-owners as well. anyone on the loan for FHA must also be a Title holder.
@@CatonDelRosariothats false
@@Jynn.33 feel free to look it up but anyone on the loan used to qualify must be on title. FHA allows for non occupant co-signers but they will be on title.
Canton! I need some help here. Looking in my state Rhode Island and I'm not finding much information on how to approach even getting a FHA first time home buyer load program. Please advise ?
Hi! I'm not licensed in RI but I recommend checkign out www.rihousing.com/ it's your state's Housing Finance Agency. Looks like they offer some solid programs for first time buyers!
Does the fha loan allow for someone to be on the deed that is not on the loan? For instance if I partner with someone and the put the down payment money up and I get the loan soley in my name. Can the deed be recorded in both of our names. Looking to purchase a 4plex. Thanks for the info.
Anyone on the loan must also be on the deed, so unfortunately anyone not on the loan cannot be on the deed. You can talk to a Title attorney about how to add them later on however.
So we are thinking of maybe buying next year because the realtor told us, it's so competitive but I'm worried the mortgage rate will go up. What's the current apr today and what do you think will be in the future...same or more?
Rates are still HILARIOUSLY low in comparison to where they were just two years ago. Conventional rates still in the low 3's and FHA/VA in the mid to high 2's. In 2018 they were closing in on the 4's. I think rates wil trend higher moving into 2022 and beyond but these things go in cycles.
Wish i had a magic ball, but remember that you should buy when RATES are low, not when home values are low because you'll be building equity faster and paying less interest
So with fha loans can you refinance within 12 months and can you also refinance with dropping 3% for down payment?
Hey I’ve been living in my fha loan home for one year now!! i plan to move out soon and rent out my house. Is it possible to transfer the deed to an LLC before I rent it out? I don’t necessarily want to refinance because I already have a low interest rate..
great question! if you plan on using your FHA loan again I'd recommend you refinance to a conventional loan to free that up. If not, there's still plenty of great conventional loan options available to you! In regards to transferring the deed to an LLC I'd recommend speaking with a local Real Estate Title expert to help you with doing that!
@@CatonDelRosario Thank you very much 🤍🙏🏻🙏🏻
I need help with mine every time I try to they just run my credit bringing it down saying I can’t get a fha loan with a 580 now I have 607 and 630 what can I do with little down
You can absolutely get an FHA loan with a 580 FICO assuming you can also qualify with income and assets. What state are you in?
So I highly doubt I'll get a response but I do have a question. I am in the middle of the process with a 630 FICO buying a house from family that I am currently living in. The mortgage company it wanting rent verification claiming that it is a FHA requirement. Gift of equity letter covering the down payment closing costs of the loan. The mortgage company is claiming that without the rental verification fha will only allow the loan to be 85 percent of appraisal value. And because I cannot provide a rental history we are now waiting on the appraisal. I have been living in house rent-free just covering the bill while it was in probate. Does this sound right?
Response granted! So t his falls under what's called an identity of interest transaction, meaning a sale between parties with family or business relationships. These kinds of sales have a hard limit of 85% Loan to Value, or in otherwords a 15% down minimum. However, there are exceptions. One of them which would apply to you is a Tenant Purchase. The EXACT FHA Guideline that you should share with your lender is the following:
A current tenant, including a family member tenant, purchases the property where he/she has rented for at least six months immediately predating the sales contract.
*Note: A lease or other written evidence to verify occupancy is required.*
The maximum mortgage calculation is not affected by a sales transaction between a tenantand a landlord with no identity-of-interest relationship.
Your issue is since you lived rent-free, there's no lease to designate you as the actual tenant of the property for the last 6 months.
@@CatonDelRosario first of all I would like to say thank you very much for your very detailed response. I am understanding correctly that rent is not the issue it is simply that the lease says that I live there rent-free?
I don’t think it’s a matter of being rent free, but I think there needs to be a formal lease agreement that was executed at least 6 months prior to your sales contract
@@CatonDelRosario there is a contract in place. And I have lived there paying the bills since March. That is what the contract requires. As stated in the contract the estate will allow the tenant to occupy the property rent free as long as electric and water are kept up to date
I would say you’d probably need to then provide verification of those utilities being paid from the start of that lease til now and then a letter of explanation from you stating that and a letter from your landlord to verify the same. I’m not an underwriter but in my opinion that would satisfy the guideline
Can I refinance and cash out fha if my taxes show a different address
How high can the percentage get on a down payment on a FHA loan?
Technically as high as you’d want, but the minimums are dictated by your FICO :)
@@CatonDelRosario thx u
Sellers market and FHA loan doesn’t work. Seller agent tend to steer their clients away from it and will go with cash or conventional loan.
I've had quite a number of FHA buyers get accepted recently. I think the market is slowing down a little and it does take a good combination of agent and LO to show why an FHA loan isn't the boogey man that most sellers think it is, especially if the property is in great condition, they pull from the same appraiser pool as conventional loans. We're closing them just as fast and easy as conventional anyways, it really largely depends on how well the lender prepped the file before sending offers out.
How fast can I refinance A fha to a conventional? Can someone help me
Usually about 6-12 months at the soonest, though right now rates are up in a big way so might actually not benefit you to refinance into a conventional loan
Yes my interest rate is at 5% That's why I was asking one more question can I refi from fha to conventional after the 6 months?
Yes! As long as you’ve made all your payments on time
@@CatonDelRosario thank you so much 👍
One issue is that you might not qualify for a 203k loan based of your debt to income ratio. Another way around it would be to do a seller/buyer funded escrow with your lender.
That’s definitely a great strategy, Kimi!
I know old comment but what is that?
I’m getting a FHA 0 down payment for a condo.
congrats!! thats so awesome, when do you close?
Update ?
FHA dropped a new 0% down program. Video going live on Monday!
Hi, what bank are using. I just got declined my FHA loan bc I did not met the 75% rental income coving the mortgage
Are you buying a multi family home?
16