Hi guys great content. I have a ? That you went over I got a yes an a no from your video. I live in Missouri an I already have a primary mortgage but I’m expanding my business 96 miles away and I found a 4 plex in that area is it possible to do a FHA loan an live in 1 of the units 4-5 days a week an my family stay in the primary that I already hold a mortgage on. Trying to figure out my best option but my primary does have about $35k in equity at the moment, should I take a HELOC and go for commercial loan. The 4 plex is $275k it was on market for 190 an then it was taken off.
Great question, this is a tricky one. Based on your situation you might be able to get a new FHA loan in the new location 96 miles away from your current residence but FHA underwriters would not want you to live in your current residence. You would have to make your current residence an investment property and write a letter explaining why you want to move to a new primary residence 96 miles away. Your family would not be able to live in your current residence. Also, a multiple unit residence will make it more challenging for a FHA underwriter to approve as a primary residence, since multiple unit properties are typically investment properties. if you were purchasing a SFR that would make it easier. Hope this helps
@@chairsboy144 It will help a little bit. The challenge will be determining which home will be your primary residence. There are not many scenarios that will allow two primary residences. My best advice would be to contact a mortgage broker in Missouri and ask them if they can dig into it for you. Hope this helps.
Really appreciate the video as always guys - when my father passed away, I moved back closer to my mom and bought a primary residence, since my work is remote. I have been charging her rent for a room to help offset the mortgage, and frankly because she wants to help out anyway. When I inevitably decide to move again, would I be able to just use this rent payment to offset the mortgage when applying for my next primary residence so that it does not negatively affect my DTI?
My situation is that i want to buy it for a family member to live in (she has her own primary and I would visit) - how do they know if we have used it for personal use for more or less than 50%?
I'm curious. What's the loop hole to get multi unit on second home? Fannie mae guidelines say single unit dwelling. Curious how you all get around this when you say in your video you can.
Hello Nathan, the only loop hole is that you have to occupy one of the units as a second residence. So, for example if you are buying a 4 unit in the mountains as a getaway place, you can purchase a 4 unit as a second home as long as you are going to use (occupy) one of the units as a second home. Note: it is important that the whole scenario follows common sense, it is important to have a good reason why you would purchase and use one of the units as a second home residence. Underwriters don't want to approve something like this if they believe you are going to rent out all units.
So what if your only 7mnths in on your primary which they say you have to take ownership for 1 full calendar year (conventional loan). Can you go FHA on second home that’s 96 miles away on 4plex understand I do have to stay there which I would be 3-5 days a week building my business for atleast a year
If you intend to stay there at times throughout the year then you can purphase as a 2nd home. If the sole purpose is to rent it out and make income then it would fall under the investment status. Hope that helps
So when you mention that you can’t use the income if you’re renting out, in your example extra rooms in a five bedroom house, are you saying you can’t use that income if you want to apply for something else or you just can’t use that income in order to qualify for said property. Excellent video by the way
Do you have to own your primary residence in order to take advantage of the vacation home mortgage? I rent my primary residence, is that a disqualification to obtaining a vacation home loan?
Thanks guys. This was very helpful. Considering buying a home for an artist studio in the city, which is 25 miles from me and offering hourly rentals for others and possible short stay Airbnb. Sounds like I can do a second home for a lower down payment requirement.
how would a second home mortgage bite you in the behind if you rent it more than you live? any examples on how? i am inheriting a home in CA and i want to live but air bnb before i turn it into something else.
I would say no initially because those are deductions of your short term rental "business" but the reality is as long as your using the home less than 50% of the time for yourself and you use it as an airbnb here and there your legal. So if its not illegal to use it for a rental business part time it wouldn't be illegal to take advantage of the rental business tax breaks? Im answering your question and mine at the same time because I think we have the same motives! lol
Hi Rita, Distance from the primary residence is not viewed as a key deciding factor when considering requirements for second homes. It is quite common to have a second home within 50 miles of the subject property. The following guidelines are taken directly from Fannie Mae on the topic of purchasing or refinancing a second home. A property is considered a second home when it meets all of the following requirements: -Cannot be another person's primary residence, excluding spouses and domestic partners. -Restricted to a one-unit dwelling. Must be able to access the property year round by automobile on all weather roads without the need of snowmobiles, boats, planes, helicopters, etc., and suitable for year-round occupancy. -The client must have exclusive control over the property. Cannot be subject to any agreements that give a management firm control over the occupancy of the property. -Must not be a timeshare arrangement. -Cannot use subject property second home rental income to qualify. -Characteristics that may indicate that a property is used as a client’s second home include, but are not limited to: Waterfront access Golf Course Secluded setting Major Metropolitan Area -The subject property cannot be set up as a second home in instances when the client is unable to provide relocation documentation.
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Very informative. Clear up a few things for me . Thank you
Glad it was helpful!
Great video!!
This was very helpful thank you!
Glad it was helpful! Thanks for watching!
Very helpful! Thank you
Hi guys great content. I have a ? That you went over I got a yes an a no from your video. I live in Missouri an I already have a primary mortgage but I’m expanding my business 96 miles away and I found a 4 plex in that area is it possible to do a FHA loan an live in 1 of the units 4-5 days a week an my family stay in the primary that I already hold a mortgage on. Trying to figure out my best option but my primary does have about $35k in equity at the moment, should I take a HELOC and go for commercial loan. The 4 plex is $275k it was on market for 190 an then it was taken off.
Great question, this is a tricky one. Based on your situation you might be able to get a new FHA loan in the new location 96 miles away from your current residence but FHA underwriters would not want you to live in your current residence. You would have to make your current residence an investment property and write a letter explaining why you want to move to a new primary residence 96 miles away. Your family would not be able to live in your current residence. Also, a multiple unit residence will make it more challenging for a FHA underwriter to approve as a primary residence, since multiple unit properties are typically investment properties. if you were purchasing a SFR that would make it easier. Hope this helps
@@TheMortgageBrothersTeam thanks for responding. My primary is a conventional loan if that makes a difference.
@@chairsboy144 It will help a little bit. The challenge will be determining which home will be your primary residence. There are not many scenarios that will allow two primary residences. My best advice would be to contact a mortgage broker in Missouri and ask them if they can dig into it for you. Hope this helps.
@@TheMortgageBrothersTeam ty
Great Info . Thank You
Glad it was helpful!
Great video!
Live in it part of the year. Can I get a 4plex live it one unit 2 times out of the month and rent out the rest? I have a primary now 3 hours away
Really appreciate the video as always guys - when my father passed away, I moved back closer to my mom and bought a primary residence, since my work is remote. I have been charging her rent for a room to help offset the mortgage, and frankly because she wants to help out anyway. When I inevitably decide to move again, would I be able to just use this rent payment to offset the mortgage when applying for my next primary residence so that it does not negatively affect my DTI?
You charge your mom rent?
Thank you gentlemen. To throw another layer on the second home, what say you regarding second home purchased with a construction (to permanent) loan?
Thanks for your question. We don't work with any construction loans that convert to permanent, however the same principals would apply.
Great video, thanks.
Glad you liked it!
My situation is that i want to buy it for a family member to live in (she has her own primary and I would visit) - how do they know if we have used it for personal use for more or less than 50%?
I dont think they do know
I'm curious. What's the loop hole to get multi unit on second home? Fannie mae guidelines say single unit dwelling. Curious how you all get around this when you say in your video you can.
Hello Nathan, the only loop hole is that you have to occupy one of the units as a second residence. So, for example if you are buying a 4 unit in the mountains as a getaway place, you can purchase a 4 unit as a second home as long as you are going to use (occupy) one of the units as a second home. Note: it is important that the whole scenario follows common sense, it is important to have a good reason why you would purchase and use one of the units as a second home residence. Underwriters don't want to approve something like this if they believe you are going to rent out all units.
So what if your only 7mnths in on your primary which they say you have to take ownership for 1 full calendar year (conventional loan). Can you go FHA on second home that’s 96 miles away on 4plex understand I do have to stay there which I would be 3-5 days a week building my business for atleast a year
Please can one buy a second home for an immediate family like a brother or sister to live in and part rented out? Thank you
If you intend to stay there at times throughout the year then you can purphase as a 2nd home. If the sole purpose is to rent it out and make income then it would fall under the investment status. Hope that helps
@@TheMortgageBrothersTeam Yes. Thank you very much.
So when you mention that you can’t use the income if you’re renting out, in your example extra rooms in a five bedroom house, are you saying you can’t use that income if you want to apply for something else or you just can’t use that income in order to qualify for said property.
Excellent video by the way
Do you have to own your primary residence in order to take advantage of the vacation home mortgage? I rent my primary residence, is that a disqualification to obtaining a vacation home loan?
Hi ,
Great question! Ownership of a primary residence is NOT a prerequisite for obtaining a second/vacation home loan.
Thanks guys. This was very helpful. Considering buying a home for an artist studio in the city, which is 25 miles from me and offering hourly rentals for others and possible short stay Airbnb. Sounds like I can do a second home for a lower down payment requirement.
how would a second home mortgage bite you in the behind if you rent it more than you live? any examples on how? i am inheriting a home in CA and i want to live but air bnb before i turn it into something else.
Can you have deductions (furnishings, utilities, repair, etc) on a secondary home if it’s used as an Airbnb part of the time?
I would say no initially because those are deductions of your short term rental "business" but the reality is as long as your using the home less than 50% of the time for yourself and you use it as an airbnb here and there your legal. So if its not illegal to use it for a rental business part time it wouldn't be illegal to take advantage of the rental business tax breaks? Im answering your question and mine at the same time because I think we have the same motives! lol
Is there a strict distance requirement between primary and secondary home?
Hi Rita, Distance from the primary residence is not viewed as a key deciding factor when considering requirements for second homes. It is quite common to have a second home within 50 miles of the subject property. The following guidelines are taken directly from Fannie Mae on the topic of purchasing or refinancing a second home.
A property is considered a second home when it meets all of the following requirements:
-Cannot be another person's primary residence, excluding spouses and domestic partners.
-Restricted to a one-unit dwelling.
Must be able to access the property year round by automobile on all weather roads without the need of snowmobiles, boats, planes, helicopters, etc., and suitable for year-round occupancy.
-The client must have exclusive control over the property.
Cannot be subject to any agreements that give a management firm control over the occupancy of the property.
-Must not be a timeshare arrangement.
-Cannot use subject property second home rental income to qualify.
-Characteristics that may indicate that a property is used as a client’s second home include, but are not limited to:
Waterfront access
Golf Course
Secluded setting
Major Metropolitan Area
-The subject property cannot be set up as a second home in instances when the client is unable to provide relocation documentation.
I have tons of questions! in a unique situation currently