Yesterday we received amazing news around 2-4 unit financing for house hackers!
This change will take place on November 18th 2023 and allow for clients buying a 2-4 unit owner-occupied property to only put 5% down.
Main take aways:
- 5% down on 2-4 units
- No income limits
- No self-sufficiency test
- Primary residence required
- No first time buyer requirement
- Minimum credit score: 620+ and must also pass through automated underwriting system
- Reserve requirement: Based off automated underwriting findings
- Maximum Debt to income ratio: Based off of automated underwriting findings (expecting this to be 45%-50%)
- Loan limits:
- 2-unit = 929,850
- 3-unit = $1,123,900
- 4-unit = $1,396,800
Refinances:
- 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.
Definition of limited cash out refinance by Fannie Mae:
- 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 ADU’s on 2-4 units. We do have work arounds for this and you can reach out to me directly if you have a property that has an ADU for guidance.
Guideline below:
- https://singlefamily.fanniemae.com/media/36841/display