Creative financing - Posted by Marcello

Posted by Marcello on March 06, 2002 at 01:50:01:

All you need to do is call up a lender and ask if they do FHA loans. If they do, they will run some quick numbers for you. To get preapproved, you will need to supply income statements (tax retuens and pay stubs) and have your credit checked. They also will need to verify that you have a certain amount of liquid assets. To do this, all you need to show is a current bank balance or liquid investments. Once they have all this information, they will take about a week or so and will come back with an amount that you qualify for. Obviously, the more you make and the better your credit the more you will be approved for. You will also need to show that you have enough cash to cover the down payment (3 percent) and closing costs. Keep in mind, with FHA financing, they tack on a few extra things at closing that you may not expect. However, you may be able to have the seller cover these costs and just account for it in the loan, but regardless, they need to know you have the cash. Any FHA lender will be able to walk you through the process. You can get FHA financing for 1 to 4 units only.
Good Luck!

Basically, I was approved for a

Creative financing - Posted by Marcello

Posted by Marcello on March 05, 2002 at 02:33:51:

I have recently been looking for a 4 unit building because I have been approved for FHA financing. However, a couple who are close friends are now looking into the same idea. We were throwing around the idea of seeing what type of financing would be available if we went together on an 8 unit building and occuppied 2 of the 8 units. We were hoping to get around 10 percent down. All of our credit is over 700 and we have lots of managment experince. Any ideas on how to look for this type of financing? We are in San Diego.
Thanks in advance.

FHA process - Posted by Brian

Posted by Brian on March 05, 2002 at 21:12:22:

How did you go about getting approved through FHA? Can you please explain the procees?

Re: Creative financing - Posted by phil fernandez

Posted by phil fernandez on March 05, 2002 at 09:19:38:

Your lowest interest rates will be with a 1 to 4 family owner occupied situation. If you and your friend buys an 8 unit the interest rate and downpayment requirements will be higher.

Weighing against the above would be that you might be able to acquire an 8 plex for less per unit than a 1 to 4 unit resulting in a better cash flow position.

I have seen banks that are willing to go with a 80 - 10 - 10 type of mortgage where the bank will lend 80%, the seller takes back 10% and you only have to come up with 10% down. Furthermore, you could use the prorated rentals and perhaps security deposits ( if your state doesn’t have a law where you can’t commingle deposits ), and close right after the 1st of the month, you could apply this amount towards your down payment to reduce it below the 10%.