An FHA loan is a great way to get into a home! Why is that? The FHA loan typically is more lenient with credit requirements and also has a smaller down payment than most other loans. This loan is a great way to get your foot in the door and to make home ownership a reality.
But what if we take home ownership to the next level?
Real Estate Investing:
Did you know you can buy a multifamily property with an FHA loan? Even if you are a first time buyer! How crazy is that?! Like most things in life there are several limitations and it would be best to consult a mortgage professional before getting too excited. Below are some examples and things to consider when choosing an FHA loan for multifamily purchases.
The FHA has loan limits and it is important to know how big the loans can go.
Chesterfield county, Henrico county and Richmond City county limits:
I don’t know about you, but that is a lot of house! if you thought an FHA loan was only for small starter homes, think again.
The FHA loan is strictly intended for owner-occupants. This means you actually have to live at the property instead of making it entirely a rental property. Talk to your lender but this can mean living in the property for a minimum of 1-2 years before being allowed to rent/sell.
Long term thinking:
What if you were able to find a feasible multifamily property in your area and would be open to living in it the minimum amount of time required before moving and buying your next home. Ideally you can keep it fully rented and be able to pay your mortgage comfortably while making a profit.
Many consider Richmond a mid-sized city with a lot of potential. There are several multifamily options on the market that are worth looking at. As always, the numbers have to make sense in order to make the move. There is currently a duplex in the Northside that is listed for $225,950. Each unit has 3 bedrooms and 1200 sq. feet of living space! Both are currently rented for $795 a month.
Rent prices should only ever rise, and with your fixed mortgage payment it seems pretty straightforward.
FHA is a great program to increase home ownership in America. Using FHA to get your first multifamily property is an unconventional but great option to build stability. Think creatively when buying real estate and never be surprised where it takes you!
written by : Luke Davis