If a home is zoned as a 2-Unit, but the appraiser states its “best use” is a single-family, will FHA accept that?

Answer: While FHA requires that a property either conform to the land zoning or be considered ‘legally non-conforming’ (see guideline below) so that it can be rebuilt if destroyed, I believe there’s some confusion here regarding ‘zoning’ vs ‘property type’.  While a residential area (one lot or many lots) can be zoned for a certain [...]

2019-07-23T10:01:13-05:00July 25th, 2019|

Fannie Mae & Freddie Mac – Second Home Multi-Unit: What is the maximum LTV for a 2-Unit purchase of a second home for both Fannie and Freddie?

Answer: It varies. If you are using their standard products, the LTV’s are limited to 85% for Fannie Mae and Freddie.  If using Freddie Mac’s Home Possible product (where there are income limitations) then the LTV is 95% and Fannie Mae’s HomeReady product still limits you to 85%. The most flexible is Freddie Mac’s Home [...]

2019-06-19T10:30:45-05:00June 25th, 2019|

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 [...]

2018-05-29T17:04:24-05:00April 24th, 2018|

FHA – Multi-Unit – Self Sufficiency Test: How do I determine “self-sufficiency” on a 4-Unit Property?

Answer: To document the self-sufficiency, please see the guidelines below. Reference: 4000.1 II, A, 1, b, iv, (B) (3) Three to Four Unit: A three- to four-unit Property is a Single Family residential Property with three to four individual dwellings. The Mortgagee must obtain a completed form HUD-92561.Self-Sufficiency Rental Income Eligibility (a) Definition: Net Self-Sufficiency Rental Income refers to the Rental Income produced by the subject Property over and above the Principal, [...]

2018-05-29T17:06:27-05:00April 24th, 2018|