A terrific way for active military and veterans to use their VA home loan benefits is to purchase a 2-4 unit property where the VA borrower occupies one of the units as their primary residence. VA home loans are very unique in that they allow a VA borrower to buy a 2-4 unit property with 100% financing if they plan to occupy one of the units as their primary residence! This is extraordinary. Yes you heard it correctly, you could buy a 4 unit unit building and put zero down.
Benefits of purchasing 2-4 units as a primary residence
There can be some really great benefits to using you VA home loan eligibility to buying a 2-4 unit property vs. a single-family home. The most obvious benefit is that you will receive the rent from the other units to help offset your own housing payment. In fact over time, you could get to the point where the rent from the other units pay the ENTIRE housing payment and you live without a housing payment! Imagine what it could do for your budget if you did not have a house payment. And even better, the rents from the other units could not only one day pay the entire housing payment on the property, but they could also give you additional income on top of that. Now if you were to buy a condo or single-family home, you have to make the entire housing payment yourself. You would not have rents from other units.
In addition, you could one day move out of your 2-4 unit property to move up to a nice primary residence and retain the 2-4 unit property as an investment for life. Over time this property would appreciate in value and also provide you with cash flow for your retirement.
Using the rents from the other units to help you qualify
A wonderful aspect of using your VA home loan benefits to buy a 2-4 unit property is that you can use the rental income from the other units to help you qualify for the VA loan. For example, if you were to buy a 4 unit property where the 3 units you would be renting would bring in $1,000/mo income each, you could use 90% of that $3,000 in rental income to help you qualify for the loan. This can enable a VA eligible borrower to qualify to buy when if they were to buy a condo or home without rental income they would not qualify.
So as you can see, using your VA home loan benefits can be an outstanding way to buy your primary residence and also provide you with a tremendous investment for your entire life.
If you want to learn more, please contact Rob our Sr. VA loan specialist using the contact info below.
Rob Chomentowski
Sr. Loan Officer and VA mortgage specialist
858-922-7899
A terrific way for home buyer to utilize FHA home loans is to purchase a 2-4 unit property where the FHA borrower occupies one of the units as their primary residence. FHA home loans are very unique in that they allow a FHA borrower to buy a 2 unit property with only 3% down payment and a 3-4 unit property with 15% down payment if they plan to occupy one of the units as their primary residence! This is extraordinary. Yes you heard it correctly, you could buy a 2 unit unit building and put only 3% down.
Benefits of purchasing 2-4 units as a primary residence
There can be some really great benefits to using FHA home loans to purchase a 2-4 unit property vs. a single-family home. The most obvious benefit is that you will receive the rent from the other units to help offset your own housing payment. In fact over time, you could get to the point where the rent from the other units pay the ENTIRE housing payment and you live without a housing payment! Imagine what it could do for your budget if you did not have a house payment. And even better, the rents from the other units could not only one day pay the entire housing payment on the property, but they could also give you additional income on top of that. Now if you were to buy a condo or single-family home, you have to make the entire housing payment yourself. You would not have rents from other units.
In addition, you could one day move out of your 2-4 unit property to move up to a nice primary residence and retain the 2-4 unit property as an investment for life. Over time this property would appreciate in value and also provide you with cash flow for your retirement.
Using the rents from the other units to help you qualify
A wonderful aspect of using FHA home loans to buy a 2-4 unit property is that you can use the rental income from the other units to help you qualify for the FHA loan. For example, if you were to buy a 4 unit property where the 3 units you would be renting would bring in $1,000/mo income each, you could use 90% of that $3,000 in rental income to help you qualify for the loan. This can enable a FHA loan borrower to qualify to buy when if they were to buy a condo or home without rental income they would not qualify.
So as you can see, using your FHA home loan benefits can be an outstanding way to buy your primary residence and also provide you with a tremendous investment for your entire life.
If you want to learn more, please contact Rob our Sr. FHA loan specialist using the contact info below.
Rob Chomentowski
Sr. Loan Officer and FHA mortgage specialist
858-922-7899
There is a lot of attention in the media right now regarding state of the American Mortgage Markets. There have been many lenders that have gone out of business and many that have lost a lot of money from mortgage gone bad. All of this attention in the media has erroneously led consumers to believe you need a 20% down payment and perfect credit to buy a house. This perception is not true, as there are excellent loans available today that allow you to put 3% down and obtain low rate 30 year fixed loans.
FHA (Federal Home Association) is a Government organization that insures loans against loss. FHA has been around since 1934 and FHA loans have begun to gain popularity again with all the changes in the mortgage market.FHA has some incredible features that allow home buyers to purchase homes with a very low down payment and obtain a low 30 year fixed rate mortgage. Additionally, FHA is not credit score driven, so if your credit is not perfect you can still get a FHA loan. Here is a summary of the wonderful features of FHA loans:
-FHA lends up to 97%, so you need only 3% down to buy
-the 3% can be a gift from a family member
-there is a program that allows the seller of the house you plan to
Purchase to credit you for the 3% down
-FHA allows the seller to credit you for 100% of your closing costs
-if you can’t qualify on your own, FHA allows co-borrowers that do not have
to live in the property
-FHA is for primary residences only (no investment properties)
-FHA is not credit score driven
So that is an overview of the benefits of FHA. As you can see there
Are ways to use an FHA loan and put zero down in the purchase of a house? You can also use FHA with the various down payment assistance programs that will be addressed in further articles.
1. Interest Rate Reduction Loan
One of the great features of VA home loans is the ability for active military and veterans do easily reduce their VA mortgage interest rates by refinancing to a lower rate 30 year fixed VA home loan. If you currently have a VA loan you can take advantage of this program to refinance you VA mortgage into a lower interest rate. This special refinance does NOT require an appraisal, income documentation or credit report. This makes it a super easy, painless process to realize huge savings. Current mortgage interest rates are close to 40 year lows, so there is an opportunity to lower your payment substantially. You must already have a VA loan to take advantage of this VA rate reduction refinance. The table below shows the savings of refinance from a 6.75% rate to a 5.75% rate. These rates are examples
| Loan Amount | Payment at 6.75% | Payment at 5.75% | Yearly Savings |
| $150,000 | $972 | $875 | $1,164 |
| $200,000 | $1,297 | $1,167 | $1,560 |
| $300,000 | $1,945 | $1,750 | $2,340 |
| $400,000 | $2,594 | $2,334 | $3,120 |
2. Refinancing from a NON VA Home Loan to a VA Home Loan
If you currently have a mortgage that is NOT a VA home loan, and you are a veteran or active military, you can also refinance into a 30 year fixed (or 15 year fixed) VA home loan. This may be particularly attractive to you if you are currently in a adjustable rate loan. In order to complete this VA loan refinance, you would need to have your property appraised and provide your credit and income documentation. Another great attribute of VA mortgages is that you can have a loan up to 100% of your properties value.
3. Cash Out VA Refinance Loan
Whether you currently have a VA home loan or NON VA home loan, you can refinance into a VA loan and get cash back. This loan allows you to go up to 100% of the properties value. In order to complete this VA loan refinance, you would need to have your property appraised and provide your credit and income documentation.
This VA refinance can be a great way to get cash to do home improvement projects. Perhaps you want to redo your kitchen, your bathrooms, your floors or your landscaping. Or, you may want to pay off higher interest rate auto loans or credit cards and thus “roll them” into a low rate 30 year fixed VA loan. A big advantage to using a cash-out VA home loan to complete home improvement projects or to pay off higher interest rate debt is that once that this expenses are not tax deductible since they are part of your VA mortgage. Additionally, you have the security of a 30 year fixed rate.
So as you can see there are some really great options for veterans and active military members to refinance into VA loans to change their situation for the better. If you have any questions, please give me a call and we can analyze your situation and discuss all the options available to you. We are VA approved mortgage company and specialists with VA lending.
Rob Chomentowski
Sr. Loan Officer and VA specialist
858-922-7899