[quote=HLS]I dont know if there are any state laws regarding this ?
1 to 4 units is considered “residential”
FNMA loans are available nationwide on 1 to 4 unit properties, with 1 unit owner occupied OR as rental property.
You need 25% down for the best pricing on rental property.
It is possible to pay up front and get 4.375% 30 YR Fixed, even on rental properties OR you get a higher rate on rental property without paying the pricing hits.
Conforming loan limits on 3 units is $645,300.
On 4 units it is $801,950.
It’s not unusual in may parts of the country to find 4-plexes from $150K-$250K that rent for $1600-$2400 gross rent per month.[/quote]
FHA can go as low as like 5% (maybe even 3.5 but I have only seen it as low as 5) for 2-4 units.
If there are 3 or 4 units then the market rent times the FHA area vacancy factor (which is not the same as the actual vacancy rate) must carry the units.
For example if the market gross rent (as determined by the appraisal) is 5000 per month (irrespective of the actual rent) and the FHA factor is 10%, then the PITI can’t be more than $4500. I think there is some room for error with regard to the “T” and the “I”.
