11/05/2023
Exciting announcement: Fannie Mae introduces 5% down payment opportunity for multi-family homes!
Calling all aspiring real estate investors! Fannie Mae has made a groundbreaking policy shift to revolutionize your homeownership path. Starting November 18, 2023, they are rolling out a game-changing 5% down payment option for owner-occupied 2-, 3-, and 4-unit properties.
Yes, you read that right! In the past, the down payment requirement for a multi-family home was 15%-25% of the property’s sales price.
This policy change means purchasing multi-family homes became much more affordable and accessible. Thanks to Fannie Mae’s forward-thinking move, more individuals can now seize the opportunity to invest in income-generating properties. This policy shift applies to standard purchases, no cash-out refinances, HomeReady and HomeStyle Renovation loans for owner-occupied properties.
First-time homebuyers and borrowers hoping to offset high mortgage rates can now benefit from a conventional loan and use rental income to pay a portion of their mortgage.
The loan amount cap for these 2-4 unit homes is now $1,396,800, enabling buyers to acquire larger and pricier properties more easily. Moreover, removing the FHA self-sufficiency test for 3-4 unit properties ensures a smoother path for buyers seeking pre-approvals for multi-family housing.
What is the FHA self-sufficiency test for 3-4 unit properties?
FHA Rule 75 states that 75% of the rental income must exceed the monthly mortgage for the property to be self-sufficient. This percentage must be at least enough to cover the mortgage payment, known as PITI (Principal, Interest, Taxes, and Insurance.)
