FHA Mixed Use financing.

[Determined2012]

Has anyone ever or recently done a deal with this type of financing before?

Most of the lenders I have been contacting in Illinois have never heard of or done a deal with this type of financing...

If you have any insight or personal experience with it please share.

 

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[hatterasguy]

FHA sucks, every time I sell a house and someone uses it for a mortgage it takes FOREVER and their are lots of problems. No way could you jump on a good deal with it unless the stars lined up.

 

[Determined2012]

Are you specifically referring to the mixed use solution or FHA loans in general?

 

[MNentre]

the unique thing about FHA is that it makes a mediocre deal, insanely good. I bought a 4plex last year with 30 year fixed at 3.75% and 3.5% down. My cash on cash is something insane like 160%. Now with the equity its gained over the past year I'm in the process of refinancing to a conventional 80/20. Then I will rinse and repeat and get into another 4 plex with <10k down

 

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[tua79610]

the unique thing about FHA is that it makes a mediocre deal, insanely good. I bought a 4plex last year with 30 year fixed at 3.75% and 3.5% down. My cash on cash is something insane like 160%. Now with the equity its gained over the past year I'm in the process of refinancing to a conventional 80/20. Then I will rinse and repeat and get into another 4 plex with >10k down

Are you living in one of the units of the 4plex? I was going to do the same thing until I was informed that I would have to live in one of the units.

Sorry, I wasn't trying to highjack the thread.

 

[hatterasguy]

FHA they take forever to close, now that the market is getting better I'm trying hard not to sell houses to people that use them. A regular bank is like 3 weeks, FHA is 60-90 days, at least.

 

[MNentre]

Are you living in one of the units of the 4plex? I was going to do the same thing until I was informed that I would have to live in one of the units.

Sorry, I wasn't trying to highjack the thread.

Technically, yes you have to. Although, I don't foresee any banks coming after you if they find out you don't live there and you're current on your loan. They have enough defaulting loans to worry about. Just my 2 cents but yes you do have to live in it.

Although, if you dont like the area very much, you can live there for a year and then refinance into a conventional loan and get out of there. If you thinking it may not appraise high enough after a year, just hold on to all of the other cash flow from the 3 other units that are rented out and come to closing with enough money to be able to afford the 20-25% down.

 

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[tua79610]

Technically, yes you have to. Although, I don't foresee any banks coming after you if they find out you don't live there and you're current on your loan. They have enough defaulting loans to worry about. Just my 2 cents but yes you do have to live in it.

Although, if you dont like the area very much, you can live there for a year and then refinance into a conventional loan and get out of there. If you thinking it may not appraise high enough after a year, just hold on to all of the other cash flow from the 3 other units that are rented out and come to closing with enough money to be able to afford the 20-25% down.

Thanks for the feedback, it's much appreciated. Also, awesome job on your quad with the cash on cash return.