2 Thoughts on Is it true that buying a multi family home requires a lower minimum down payment than for a single family?
  1. Reply
    April 5, 2013 at 6:25 pm

    It depends on your lender. If you are buying it for an investment you generally need 25% down.

  2. Reply
    April 5, 2013 at 7:08 pm

    Defining multifamily as 1-4 units most lenders consider these type properties as they would a single family home. You could purchase the property as a owner occupied home, thus renting out the other units. You would be required to make the same down payment as if you were purchasing a single family home.

    If you were purchasing the property with no intention of residing in the property thus the property would be non-owner occupied. Most lenders in the finance of these properties would want more of a down payment, and the interest rate would be a little higher.

    These same principals are prevalent when purchasing property using government mortgage loans such as VA and FHA. If you plan to purchase a 1-4 unit owner occupied family units then you could still get a mortgage backed Va loan for nothing down and the same interest rate as a person purchasing a single family home.

    The same applies to a FHA mortgage loan if you plan to purchase a 1-4 unit multifamily property and live in one of the units you could have a down payment as low as 3.5% with interest rate as those purchasing a single family house.

    If you are purchasing more than 4 units then you would be required to make a larger down payment than a person purchasing 1-4 units. When purchasing more than 4 units, you are considered purchasing a commercial property.

    Therefore the rules, down payment and interest change.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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