Best Financing Tips
Best Financing Tips
Call for my list of professional loan officers, this is the kind of valuable
information they provide to help you work out financing challenges!
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(The following is excerpted from one of my favorite loan officers emails)
"Buying a double. It is a fantastic way for a new homeowner to get into homeownership and it’s an amazing way to build wealth over the long-term.
I spend a lot of time game planning how to finance these, so below are my cliff notes that I share with clients:
· Conventional financing
o Typically requires 15% down on a double that will be a primary residence
with a maximum loan amount of $620,200.
o Does not allow a double to be used as a second home – must be categorized
as a primary residence or investment property.
§ If labeled investment, down payment requirement jumps to 25%.
§ I get this scenario a lot – they want to rent one side and use the other side
when they are in town. They can do this from a tax perspective, but there
is no gray area with Fannie. It’s either a primary or an investment.
o We are allowed to use 75% of the rent to qualify a homebuyer, so a person
can often afford a larger price point than on a single family
§ One thing to pay attention to if you are the listing agent – we do get the
leases for the current tenants, so if we are categorizing it as a primary we
will want to ensure that our buyer is moving in within 60 days of closing.
o ***Loophole – Freddie Mac has a HomePossible program that allows 95%
financing on a primary residence double
§ The key is that the buyer must make below $65,600 or the property must
be located in a “No Income Limit” census tract. If it is located in this
census tract, the property qualifies on its own and the buyer can make any
§ Here is the link to search specific addresse
· If you search a property and it comes up with “Home Possible Income
Limit: No Income Limit” then any potential buyers can finance up to
95%. This changes the pool of potential buyers drastically!!
· FHA Financing
o FHA doesn’t make a distinction based on property type – so they finance up to 96.5% for doubles too!
o Maximum loan amount for FHA on a double is $403,125.
o Tighter appraisal standards than conventional, but still a very functional loan.
· Jumbo Financing
o If your client needs a loan amount larger than $620,200, then there are jumbo loans available.
o Most of them cap out around 75% loan to value, so they do need a bit more down."
Contact me for my favorite Loan Officer Names List
Linda Babineaux 504-957-8014 cellular
Check back often for more great loan officer tips on my Blog site!