How to Have Your Roommates Pay Your Mortgage

 
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Benefits of a 2-4 unit primary residence property with only 3.5 - 5% down!


A multifamily home is a property with more than one housing units. For residential purposes, multifamily homes can have 2 to 4 units maximum. Anything larger is considered commercial and adheres to different mortgage guidelines. Each residential unit must include entry to its own private bedroom, bathroom, kitchen, etc.  

Although these properties are less common than single-family homes, there are many benefits in purchasing a multifamily home. Purchasing a home that has multiple units allows you as the owner to live in any of the units whilst also renting out the remaining units. That rental income from the additional units can help offset the costs of your mortgage, property tax, insurance etc.  Other benefits to multifamily homes include ease of multigenerational living and added tax breaks. Large families living in shared quarters can pose it difficulties, but with a multiunit property, families have the option to live together, but separately. In addition, when you own a multifamily home, you not only can deduct your mortgage interest or write off property taxes, but you may now also be eligible to deduct expenses related to your additional units such as maintenance, upgrades, and depreciation. 

Financing a multifamily home has different mortgage guidelines than that of a single-family home especially with regards to down payment options. The FHA program does allow for only a 3.5% down payment on multifamily homes, but FHA does have more strict property eligibility requirements as the property must pass FHA’s self-sufficiency test.  FHA can still be a great option for purchasing a multifamily home, but make sure your lender tests the property’s self-sufficiency prior to putting in an offer. In other great news, Freddie Mac has just announced as of November 15, 2021 they will now accept just 5% down on a multiunit home for their specialized low income program Home Possible.   Previously, this program required at least 15% down, following similar conventional loan guidelines. Home Possible is a great low down payment option for multiunit home buyers, as unlike FHA where monthly mortgage insurance never terminates, Home Possible does grant cancelable monthly mortgage insurance at below an 80% loan to value. Home Possible does have other benefits for home buyers, the only major caveat is they do enforce an income limit dependent on the area of the property.  For more information and to find out what loan program best suites you, please contact Kevin Berju.



Article Written By: Kevin Berju, Branch Manager AFN, www.PhillyMortgageTeam.com

American Financial Network NMLS # 137213



Multi-Family Homes For Sale:

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Kevin Berju starts Philly Mortgage Team with over 25 years in the mortgage industry. Prior to working with residential and commercial mortgages, Kevin graduated with a business degree from Temple University, owned his own business, and worked as an agent for years in both commercial & residential Real Estate. With Kevin’s diverse knowledge of the real estate and mortgage industries, his clients are thoroughly guided throughout their home buying or refinance process. As a result of his knowledge, attention to detail, responsiveness to his clients, and exceptional work ethic, Kevin was awarded the Five Star Mortgage Professional recognition in Philadelphia Magazine for the past successive years as well as reaching the top 1% of all originators country wide since 2012 as designated by Mortgage Executive magazine.

As a mortgage professional for over 2 decades, Kevin is an invaluable resource for both first-time and experienced home buyers. With his accomplishment of the Certified Mortgage Planning Specialist designation, Kevin is placed in an elite group of the top 5% of mortgage professionals in the industry. Looking to Purchase or Refinance in Pennsylvania, New Jersey, or Florida? Kevin Berju is the Lender for You!


Venture Philly Group

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info@venturephilly.com

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604 S Washington Square, Philadelphia, PA

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