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Old 03-03-2010, 10:28 PM
 
1 posts, read 8,440 times
Reputation: 10

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Good evening,

I am a 24 year old in Alabama looking to buy a house for the first time. I have a stable job of over 3 years and have had increasing income over that time. I want to take advantage of the first time home buyer credit. I make right at 50k last year.

I have found a duplex property which is in my budget and is in good condition. I recently had a lender at the bank tell me that PMI is no longer available for a duplex property and therefore I would have to put 20% down on the property. I haven't been qualified or prequalified nor have I even applied for a mortgage.

I have been looking at HUD/FHA loans because at this time I can only afford about a 5% down payment and I am wondering if what she told me is correct.

She stated "Private Mortgage guidelines apply to all lenders, so you would run into this problem with any loan you are trying to secure that falls under Fannie Mae Freddie Mac Guidelines that would require Private Mortgage Insurance for loan to values over 80%."

The hud site doesn't really list every detail but at Let FHA Loans Help You - HUD it states that FHA loans are available for 1-4 unit properties.

Can anyone with experience or knowledge please comment?

************** By the way I want to live on one side and rent the other.

Thanks,
rocketc

Last edited by rocketc; 03-03-2010 at 10:53 PM.. Reason: Missing info
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Old 03-03-2010, 11:47 PM
 
382 posts, read 1,282,368 times
Reputation: 258
I'm not a professional, but my mom was able to get a FHA loan with a guest house in the back yard. She closed last August I believe.
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Old 03-04-2010, 11:12 AM
 
Location: Salt Lake City UT
61 posts, read 300,825 times
Reputation: 26
Default FHA Loans for Duplex

If you are going to live in one of the units, then you can get an FHA loan. Rules are the same for duplex as they are for single family. (3-4 units require reserves)

Remember that you must live in one of the units for at least a year plus a day. You need to assume that they will check and it is not worth you or the people involved with the loan getting into massive trouble over fraudulently saying that you are living there if you are not.

My 2@ worth. I would suggest that you buy something that you can make the entire payment yourself. Depending on getting renters that will pay their rent on time forever is not a great way to start out.

I admire you for starting out at your age to become a landlord. Short term values go up and down, long term they always go up. When you are ready to retire and if things go well for you, you will be able to retire with a great income.

Good luck and come back here with questions. You will find that the members here have a wealth of knowledge.
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Old 03-04-2010, 03:23 PM
 
Location: Anchorage, AK
73 posts, read 267,143 times
Reputation: 61
What she told you is incorrect. You can do FHA financing on an owner occupied duplex and the minimum down payment is 3.5%. FHA loans do have mortgage insurance (MI) but it is financed into your loan amount.

The loan she was talking about was probably a conventional loan. And right now it is very hard to get PMI, though some companies still do owner occupied 2 unit properties. But if you live in an area that the PMI company considers a declining market, then it may not be possible to get.
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Old 03-06-2010, 11:27 AM
 
Location: Plano, TX
75 posts, read 232,973 times
Reputation: 29
Sounds like your loan officer doesn't offer FHA loans.
FHA will surely do this with 3.5% down.
Go apply
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Old 01-18-2011, 05:12 PM
 
1 posts, read 8,029 times
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Hello! we want to buy a duplex and NOT live in it. we have the 20% conventional amount to put down. HOWEVER, do we have to do conventional or can we get an FHA loan without living in one side. In state of Georgia. thanks!!!
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Old 01-18-2011, 05:47 PM
 
Location: Laguna Niguel, CA
768 posts, read 4,181,147 times
Reputation: 457
You can only buy owner occupied homes with FHA financing, if you aren't going to live there then you need to use conventional.
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Old 01-18-2011, 08:21 PM
 
Location: Kansas City, MO
5,763 posts, read 10,326,083 times
Reputation: 2821
My first home I purchased was a half duplex and I was financed by an FHA loan. This was 11 years ago but I dont think rules have changed much in regard to what type of properties get approved. As long as it is going to be your primary residence then it will be fine.
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