Financing Rental or Multi-Unit Properties
Do you want to have rental income? Do you see the benefit of collecting rental income or owning investment properties. Financing is a bit stringent for straight-up investment properties, but if you plan to live in the property there are some great options available to you!
Single Family Home with Accessory Apartment
This type of property can be financed the same as a Single Family Home with programs such as VHFA or Conventional Financing. No additional bump in interest rate or in closing costs! Typically you must live in the house in order to be able to rent out the additional unit as zoning laws can be quite strict. At our house in Essex Junction, our rental income covers half of our mortgage payment! What a great way to free up additional money in our budget for investing and saving while having almost the same about of privacy as a single family home.
Owner Occupied Multi Family
Two Unit Purchase with VHFA: If you are a 1st time home buyer (have not had an ownership interest in a property) in the following counties: Addison, Bennington, Chittenden, Grand Isle or Windsor (this requirement is waived in the rest of the state), you may qualify for 5% down payment on an owner occupied 2 unit home. This program allows for reduced monthly private mortgage insurance and slightly reduced closing costs. There are income limits on this program. Contact us today and we can confirm your eligibility.
2-4 Unit Purchase with FHA: Looking to purchase a multi-unit to live in that is 2-4 units or don’t qualify for VHFA? FHA could be a good option for you. FHA allows purchases of 2-4 unit properties with as little as 3.5% down payment. A great option to get into a multi-family home with little money out of pocket. The downside of this program is that you pay an upfront fee as well as a monthly fee. The monthly costs (including the MI) tend to be a bit higher, but if you are able to get into a multifamily, you’ll have rental income to help pay for the additional cost.
Non-Owner Occupied Multifamily
Traditional financing programs (allows financing of property with up to 4 residential units) require 25% down payment on a non-owner occupied multifamily investment. You can finance multifamily homes with a conventional loan which grants you the benefit of a long term fixed rate, but there is limit to the number of properties you can have financed with conventional loans.
An experience realtor can help you search for the perfect property to meet your rental income goals! We’d be happy to connect you to an experienced Realtor!