Tag: 2-Unit

USDA and Multi-Unit Properties

Question: Will USDA allow a Two-Unit property if the borrower lives in one of the units? Answer: Unfortunately, no. One-unit properties are all they will allow. Social Media Post: Did you know that USDA will only allow a one-unit property and not a 2-4 unit property? However, FHA and conventional will allow multi-unit properties.  If […]

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FHA – Qualifying Rental Income on 2-Unit Property: Does FHA specify that the smaller unit must be used when qualifying a borrower with rental income? Chart-Rental Income Requirements – All Agencies

Answer: No. FHA does not require that the smaller unit be used for qualifying purposes. That said, expect an underwriter to review the practicality of the borrower using the smaller unit as their primary residence. For example: If the borrower is the only occupant, and the units are a 1 bedroom and a 3 bedroom, […]

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FHA – Non-Occupying Borrower – 2-Unit: What is the maximum LTV for an FHA loan if I use a non-occupying co-borrower?

Answer: The answer is that it depends!  See the guideline below to determine if your borrower can use the maximum LTV of 96.5% or 75%. Reference: 4000.1, II, A, 2, b, ii (B)LTV Limitations Based on Non-Occupying Borrower Status (1) Definition: A Non-Occupying Borrower Transaction refers to a transaction involving two or more Borrowers in which one or more of […]

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