I have some great news to report, as Fannie Mae is dramatically reducing the down payment requirements for purchasers utilizing multi-unit properties as their primary residence.
Historically, buyers would need to bring in a minimum of a 25% down payment for a 3-4 unit property or 15% for a duplex. That all changes starting November 18, 2023.
Now, any multi-unit property (2-4 units) can be purchased with just 5% down!
Here are the new calculations:
Here’s a little bit more:
Specifics
This is for a primary residential purchase only, and mortgage insurance will apply if utilizing the 5% down option.
Secondly, 75% of the expected rents of the non-owner occupied unit(s) can be used as qualifying income for the loan application.
The MBS Highway Survey, which is comprised of roughly 3,000 Mortgage and Real Estate Professionals, was just released for August.
For buyers looking to purchase real estate, this slight cool-down in activity may present a wonderful opportunity!
There is certainly a slowdown in activity and pricing pressure from July to August, but 53% of respondents are still citing that their markets are active, while 47% note that it is slower.
16% of those surveyed are still seeing price increases, while 58% are seeing some degree of price decreases, although many of these are listing prices that are coming down to earth and not home value declines.
Out west, you can see that activity is slowing and pricing pressure has decreased dramatically!
Almost half of the respondents are seeing the sales pace at normal levels, with homes selling near the asking price.
Of those who said activity was slower, many cited that it was due to a lack of inventory. In addition, many are still seeing multiple offers, but less than in previous months.
Please do contact me for more information, as I would be glad to send you a customized report showing the health of the real estate market in your local area.
Owning investment properties can be a great way to earn extra income. I’m linking today to an article from Peter Warden at The Mortgage Reports on a fantastic article for would be real estate investors.
Whether it’s a career choice or an extra source of income, becoming a landlord requires hard work, knowledge, and time. The idea of rent collection as a source of passive income attracts many new landlords to this profession.
But experienced landlords know this job requires an active approach. The more you work to maintain properties, find the right tenants, and keep track of all the details, the more successful you can be.
Many of my clients have found that owning rental property is one of the best financial moves they ever made.
At the same time, owning rental properties isn’t easy and involves a good deal of effort. However, the financial rewards can make all that worthwhile!
As Warden states, “True, owning a rental property rarely makes people rich quickly. But getting rich slowly is a very attractive alternative.”
What’s the first step? Doing the research on how to make a rental property purchase. Do reach out to me for more, as it would be my pleasure to help on the financing side.
Mortgage rates are at all-time lows. Many homeowner’s are taking advantage and locking in for the long term. But what about investors, are they doing the same?
Refinancing rental properties can unlock a good deal of wealth-building opportunities for investors, including the ability to lower interest rates and monthly payments, improve loan terms, and earn additional cash flow.
Interestingly, many investors have not taken advantage of today’s market.
For one reason or another, there are a number of investors that don’t even realize the opportunity that’s in front of them.
Should I Refinance My Rental Property?
In most cases, investors should consider a refinance to:
Much has changed in a relatively short period of time regarding rates and valuations…and they are almost all in favor of the investor.
As mentioned earlier, interest rates are historically low…and they look a lot better than they did even this time last year, let alone a few years ago.
5.75% versus 4.5% example
If you purchased an investment property in October of last year, for example, many borrowers took on mortgages with an interest rate in the high 5% range.
Today, if that investor were to refinance their $250,000 loan from 5.75% to 4.5% for example, they would save nearly $200 per month.
There might be some discount points involved depending on the scenario, but they can be financed into the loan amount, so the only out-of-pocket cost would be that of an appraisal.
Assumptions: $250K loan, 70% loan-to-value and 760+ credit score
In Conclusion
When you own an investment property, the goal is to earn a solid rate of return…and refinancing that property can increase your short-term cash flow and help you build longer-term wealth.
Do reach out to me for more, as it would be my pleasure to help you look at different options and programs that might help you in today’s market.
Despite the popularity of house flipping, the biggest barrier to entry and success in this space is cash. Without enough money, you can’t purchase the home, pay for renovations, or find a buyer for the property when the time comes to sell.
Fix and flip loans are used by short-term real estate investors to purchase and renovate a property before flipping it for a profit or refinancing it after rehab. This type of financing for flipping houses offers investors fast closings for properties in any condition.
Finance of America has a fantastic set of offerings in this category…..
Not sure whether you need the Fix & Flip Single Loan or
the Fix & Flip Exposure Limit?
The Fix & Flip Single Loan is designed for
investors who need funding to flip a single investment property.
The Fix & Flip Exposure Limit is a line of
credit offered to experienced investors who plan to acquire and/or renovate
multiple properties.
All Fix & Flip Exposure Limits allow
investors to close quickly.
Both Fix & Flip Single Loan and Fix &
Flip Exposure Limit offer the option of rehab funding, if needed.
Our commercial offerings are quite unique. These products are in-house from
origination to funding. Controlling the financing from origination to funding
allows our investors to reliably plan the timing for their projects. Timing is
always important in the real estate market, especially in construction and
rehab.
For experienced investors we establish an exposure limit and for new investors we start our first project together with a single mortgage. Contact me for more details.
Thomas Eugene Bonetto
Mortgage Loan Originator
NMLS: 1431961
About The Coach
Tom Bonetto has been helping his customers and players achieve their best for nearly 30 years. His goal is to provide both a superior customer experience and tremendous value for both his business associates and his players alike.
