Owning a multifamily complex can be a wonderful opportunity to build wealth and learn more about real estate investment. Earn rental income even while you live on-site while building up savings and equity in the building. The process of financing one- and four-unit properties can very similar to obtaining a mortgage on a single-family home. This week learn about opportunities from Nickel City Funding using one- and four-unit multifamily financing in Orchard Park, NY.
Using Multifamily Property Loans
It is important to understand that the number of units you plan to finance impacts the type of financing you can obtain. Generally, the smaller properties of one to four units fall into multifamily financing mortgages. Properties with more than four units will likely require a commercial lender and additional requirements that you must follow. For this week’s post, we will focus on one to four-unit properties.
Financing Your Multifamily Property
Using a similar loan program as you would to purchase a single-family home can be a good strategy to obtain a multi-family property. FHA Loans, VA Loans, and conventional loans all have programs available for one to four-unit purchases. The FHA and VA will restrict the type of property that you can obtain and may want to inspect the complex before you buy.
Using FHA Multifamily Financing Loans
If you chose to use an FHA loan, you will have to live on the property, but the program can be more accessible financially. You can get as low as 3.5% down payment requirements, great good rates, and may qualify even if your credit score is not excellent. Your total loan financed must fall into conforming criteria for the FHA and not exceed limits.
Using VA Multifamily Financing Loans
If you want to use a VA loan for multifamily financing, you must be a qualifying current or former military member. You will also have to live on-site as you would with an FHA loan. However, no down payment may be required. Benefits and rates for the program are also excellent. Another perk is that VA lenders will not require private mortgage insurance. You also do not need perfect finances and credit to qualify.
Using Conventional Multifamily Financing Loans
Unlike the VA and FHA, conventional loans are non-government sponsored. However, there are still restrictions on the size and cost of the properties that they will pay for. Conventional lenders may require you to pay mortgage insurance. You may also end up with a larger down payment than with FHA and VA Loans. Your credit score may be scrutinized, depending on the lender.
Professional Mortgage Solutions in Orchard Park, NY is here to help you find one- and four-unit complexes available in the area. We are excited to help you on your real estate investment journey; feel free to reach out with any questions you have about financing.