3+2=4plex? (!) - Posted by gary

Posted by BrokerScott(Mich) on October 05, 2003 at 05:39:18:

I would ask them (FHA)what their criteria are. I know of a situation where a person wanted to put in a home office over the garage he was building and the primary criteria was that he could only put in a half bath, not a full one. (I’m sure there were others but memory fades) Second you need to check the zoning and see if this property use is permitted. Something like what you described sounds like it is ‘grandfathered’ assuming that it’s all one one lot. If you go changing things around, you might end up having to conform to current zoning. If it’s on separate lots, you would likely have to get separate loans anyway, thus making your question moot. I’m not up to speed on what the latest criteria for 203K’s are but I don’t think you need to necessarly live in one. In any case, I would check the zoning status first. Best, Scott

3+2=4plex? (!) - Posted by gary

Posted by gary on October 04, 2003 at 20:43:12:

I have found a property that has a duplex and a triplex.

I would like to get a FHA loan on this property if possible because:

  • one unit will be my personal residence
  • 3% down w/FHA
  • FHA 203k for rehab

I understand that FHA will only loan up to a 4plex if one unit is used for personal residence.

My question is this…could we call the duplex a duplex and then call the triplex a duplex and the extra unit would be used as an office/community meeting room/exercise room? This would then equal a 4plex. No rent would be collected from the multi purpose unit.

Do you think I could get an FHA loan for this property? And how hard is it going to be to get this property reclassified as a 4plex w/ an office multi purpose unit?

Go ahead and shoot me down. I’m ready!


Another thought - Posted by Ed

Posted by Ed on October 05, 2003 at 08:08:05:

One important question is how are they parceled? Are they listed with the tax assessor as two separate properties? Check that. I bought a duplex and triplex on what I first thought was the same lot but ended up being on adjacent lots. I got residential financing for them, vs. commercial financing, because of that.

See how they are parceled - and look at possibly an FHA loan on one of them (or maybe both of them). If not, use low down for the most expensive one with an FHA loan, and find the cash (?) down payment for the least expensive mortgage - residential loans vs. commercial loan will at least lower your monthly payments by decreasing the interest rate and increasing the term of the loan.