Navigating the World of Multi-Family Homes Financing

David Lenoir, a seasoned real estate expert from the Greater Boston area, and Rick Waldron from Guaranteed Rate Affinity, a leading figure in home financing, shed light on a topic that’s gaining traction in the real estate world - financing multi-family homes. This article promises to be an enlightening journey as we delve into the nuances of multi-family homes, their appeal, and the recent changes in financing guidelines. So, let’s dive right in!

The Appeal of Multi-Family Homes

David highlights a shift in the real estate market stating that “multi-family homes have become a hot commodity in real estate.”

Defining Multi-Family Homes

Rick provides a clear definition of what constitutes a multi-family home, which is a building having between two and four housing units. Any more than four, and it’s considered a commercial property. He explained that each of the units should be self-sufficient.

Affordable Alternatives and Changing Guidelines

David points out the benefits of multi-family homes for families seeking affordable alternatives to single-family homes. He also mentions recent changes in down payment requirements.

Rick elaborates that Multi-family homes have different mortgage requirements that depend on the type of multi-family and what it’s being used for. For example, if you are purchasing a multi-family to be used as an investment property, you are required to put 25% down. However, there was a recent change with Fannie Mae late last November. It is now possible to put 5% down and qualify for Private Mortgage Insurance. The maximum LTV ratio for two-unit properties has been increased from 85% to 95%, and for three or four-unit properties has also been increased from 75% to 95%.

Looking Ahead

David wraps up the discussion by hinting that the next topic will be about buying a multi-family as an investment property. The landscape of real estate is ever-evolving, and staying informed is key to making sound investment decisions.

Stay tuned for more insightful discussions on real estate and financing from David Lenoir and Rick Waldron! Remember, whether you’re considering investing in a multi-family home or exploring other real estate opportunities, we’re here to guide you. Don’t hesitate to reach out to us for any of your real estate needs. We’re committed to providing you with expert advice and personalized solutions.

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