Great News: There are Financial Tools that Make Investing in Duplexes Easier
Did you know that it’s possible to qualify for a duplex with FHA financing? FHA financing requires as little as 3.5% down as opposed to conventional loans that require (at minimum) 5-10% down.
In fact, first-time homeowners utilizing FHA financing have a distinct advantage over investors in this way. For an investor, it’s usually necessary to come up with a down payment of at least 20%. This is the case because there are far fewer programs available to “help out” investors that are after a second, third, or even tenth property. The government would much rather help first-time homeowners to buy their first and only place.
In addition to FHA financing tools, it’s also great to know that there are actually loans available that can be utilized as down payment assistance. In the past, both the city of Minneapolis and the city of St. Paul have offered down payment assistance such as this.
However, this isn’t always the case, and it’s important to either check with us or your lender to see what kind of programs are available to you at a given time.
Other Important Things to Know
It’s nice to know that you’re not left in the cold as a first-time homebuyer and that programs are available to help you out here and there.
If you’re in the position where you feel like you will be unable to qualify for a duplex, then we have even more great news. In fact, even if you do know that you can qualify, this could be a game-changer:
You can often qualify for more when you’re going after a duplex.
Because duplexes are income-producing assets – not liabilities like single-family houses. Mortgage lenders take this into consideration and many offer programs that make use of up to 75% of an anticipated rental payment as your income when you qualify.
That means that going after a duplex offering $1,000 in rent from the other side will add $750 towards your bottom line. For some duplex buyers, that makes all the difference.
If you’re afraid that you won’t qualify for a home, a duplex could be exactly right for you. In fact, we’d be happy to chat more about this in person or on the phone. Feel free to reach out and get in touch with us. No matter where you are in your process, we’d be happy to help as much as we possibly can.
Also published on Medium.