Keys to Qualify FHA Loan on 2-4 Units Owner Occupied in California

by rob on July 22, 2010

Keys to Qualify FHA Mortgage on 2-4 Units Proprietor Occupied in California is a post from: FHA,VA and Conventional House Loans in all 50 States

FHA has wonderfully versatile and lenient recommendations that allow house buyers in California to get FHA mortgage to buy a 2-4 unit property as an proprietor occupant.  If you buy a duplex, triplex or fourplex and live in one unit and rent the other people, you can buy the property with the reduced FHA mortgage down payment of three.5% and also get today’s report reduced FHA mortgage interest charges.  Whereas an investor who buys a 2-4 unit property as an investment property they will not live in has to place 25% down and have much tougher mortgage qualifications and not quite as great interest charges.  So there are some large advantages to purchasing a duplex, triplex or fourplex with FHA financing.

Now here are some of the keys to keep in thoughts when get FHA mortgage to buy a 2-4 unit.  First of all, if you a purchasing a 2 unit duplex property, there is no difference to the FHA mortgage approval qualifications of a condominium or single household house.  You just require the minimum FHA mortgage down payment of 3.5% down (and that can be a present from a relative), a 620 credit score score and all of the other standard qualifications.  But with a three-4 unit constructing there is an additional twist to qualifying for FHA financing.  With a three-4 unit constructing, the total marketplace rents of all the models (including the one you will live in) must be equal to or greater than the principle and interest of the mortgage + monthly property taxes + month house insurance coverage (otherwise known as PITI).   If the total rents do not equal the PITI, then you must increase your down payment until they do equal the PITI.

Also keep in thoughts a actual big advantage to purchasing a 2-4 unit property with an FHA mortgage is that you can use the rents from the models you don’t occupy as income to assist you qualify for the mortgage. 

It can be a very financially wise thing for a house purchaser to buy a 2-4 unit property:

  1. They can one day move out of the property and retain the property as a investment property for money movement, appreciation and tax advantages
  2. If they plan to stay in the property, as time goes on the other models you do not occupy rents will rise ultimately having to pay for one hundred% of the expense of owning the property allow you to basically live for free
  3. In costly areas of California such as San Francisco, San Jose, Los Angeles, Orange County, San Diego and Santa Barbara where single-household houses have would be as well high of a housing payment, owning a 2-4 unit can allow you to make ownership more inexpensive simply because you can gather the rents of the models you do not occupy 

So please give me a call or deliver me an email if you are purchasing a 2-4 unit property with an FHA mortgage and/or would like to be approved for an FHA mortgage to buy one.

Right here are some reminders about some of the advantages of purchasing you house with FHA mortgage in California or a conventional mortgage:

  • FHA mortgage credit score score does not have to be perfect, a 620 score can get you excellent FHA mortgage interest charges in California
  • Optimum FHA mortgage in California is $729,750.  Numerous counties and cities in California such as San Diego, Los Angeles, Orange, San Jose, and San Francisco allow you to go all the way up to $729,750 with just three.5% FHA down payment
  • FHA mortgage vs conventional loan…FHA demands only three.5% down payment, permits decrease credit score scores and greater debt-to-income ratios.  Conventional can be had with 5% down, no up front home loan insurance coverage but had much greater credit score score and debt-to-income ratio requirements
  • FHA mortgage down payment minimum is only three.5% and can be a present from a relative
  • FHA mortgage interest charges are STILL close to report historical lows!
  • Conventional loan offer the Fannie Mae Homepath mortgage with as small as three% down and no appraisal required, see my earlier article about Homepath  (

Give me a call (858-922-7899) or email ( if you have any questions at all about obtaining approved for a FHA, VA or conventional Loan.

Warmest Regards,

Rob Chomentowski

Sr. Mortgage Officer


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