I’m under contract on a 4-plex. All the 4 units are currently rented but two are on a month to month where one is rented for under market value which is the one I want to move into.
Any suggestions on where to shop around? There used to be a mortgage rate sticky thread but I don’t see it anymore.
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Which state? Most lenders won’t take issue with this in my experience. Just have to prove it will be your primary residence and that tenant will be leaving
Better.com has a tool where you can put in the specifics of the property and get a good idea on rates. Link at the top of their homepage
Ohio
AFAIK the rate on a 4-plex that you plan to make your primary residence should be the same as the rate on a SFH.
As I’m finding out, that is true to some lenders but not to all. Some are changing the rates and some just won’t do 4 units.
Are you putting at least 20% down and borrowing less than the conforming limit (510K)? That should get you the best terms / lowest cost, and I don’t know why any lender would care that it’s a 4-plex. Fannie/Freddie back these loans and make the rules.
Yes and apparently fannie and freddie don’t see eye to eye here, one allows 20%, the other requires 25%. Not that it matters but might explain why certain lenders kept telling me 20% isn’t doable.
I haven’t looked at the latest guides or done this myself, but from past experience (of searching and comparing mortgage rates and costs) both require 25% for investment property. But a 4-plex that will be your primary residence is supposed to fall under the same rules as a SFH, so 20% for the best terms. You can find the underwriting rules on their websites.
I’m mentioning it just in case lenders are steering you into the wrong product (or, worse, don’t know the difference).
I appreciate it, a 4-plex w/ primary under Fannie requires 25% LTV, but Freddie requires 20% so just need to make sure the lender is aware and checks the guidelines. Almost all the lenders on zillow changed the rates (SFH) on me when I mentioned it was a 4-plex regardless if it was primary and 20% or 25% down. Anyway I think I got financing squared away, I wish the property cash flowed better but it’s definitely a sellers market.
What tenant portals do you use? I’ve read good things about Cozy but new accounts are all new w/ apartments.com. There’s also avail.co, Zillow, Zibo.co, TenantCloud.