Fannie Mae just gave some potential buyers an early holiday gift. In a significant policy change, Fannie Mae announced they will accept 5% down payments for owner-occupied 2, 3, and 4-unit properties. This marks a departure from its previous guidelines requiring 15-25% down for these properties. The maximum loan amount allowed for these 2 to 4-unit properties is set at $1,396,800 for 2023 and will likely go up (but not much) when loan limits are announced for 2024.
Opportunity for First-Time Homebuyers
This new option presents an opportunity for even first-time homebuyers to invest in a property that is both a place in which they live as well as income-producing. I have had several clients over the years who owned 4-unit properties, lived in one of the units, and used the income from the other 3 units to pay the mortgage payment. Of course, that is not always the case.
In the past, the number one barrier to owning and living in a 2 to 4-unit property has been the required down payment of 15 to 25% (depending on the number of units). This guideline change of only needing 5% should open up this type of property for more buyers.
I hope that everyone had a wonderful Thanksgiving holiday. I am full, both physically and emotionally, from all the food, family, and friends. And I am grateful for all of you – your comments on my newsletter, referrals, relationships, and loyalty.
Please contact us with any questions you may have!