In a significant policy change, Fannie Mae announced that it would accept 5% down payments for owner-occupied 2, 3, and 4-unit homes. This departure from the previous multifamily financing requirement of 15-25% down payments for duplexes, triplexes, and fourplexes marks a significant policy change.
This new option presents an excellent opportunity for individuals looking to invest in multifamily homes while also enjoying the benefits of homeownership. Prospective owner-landlords can now afford these properties more efficiently, thanks to the reduced down payment requirement by Fannie Mae.
The policy change applies to standard purchases, no-cash-out refinances, HomeReady, and HomeStyle Renovation loans for owner-occupied transactions. This means that first-time buyers and individuals seeking to offset high mortgage payments can take advantage of Fannie Mae’s more accessible financing options.
The maximum loan amount allowed for these 2-4 unit properties is set at $1,396,800, ensuring that larger and more expensive properties can be purchased with flexibility. Additionally, eliminating the FHA self-sufficiency test for 3-4 unit properties means that buyers will face fewer hurdles when seeking pre-approval for these types of multifamily homes.
This policy shift represents a significant opportunity to lower mortgage payments by leveraging rental income for owner-occupant landlords. The ability to make a smaller down payment not only makes multifamily homes more accessible but also allows home buyers to gain valuable landlord experience, as they have the opportunity to collect rent from other units while simultaneously building equity in their own property.
Fannie Mae’s move to lower the down payment requirements for multifamily homes is a promising step towards improving access to credit and affordable rental housing. With this progressive policy change, the dream of owning a multifamily home while generating rental income is becoming more attainable for mortgage loan borrowers. To learn more about this change and how it can benefit buyers, please get in touch with Andy Schoemehl at 314-221-7797.
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Andy Schoemehl | Vice President |
