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In a significant policy shift, Fannie Mae has announced that starting from the weekend after November 18, 2023, it will accept 5% down payments for owner-occupied 2-, 3-, and 4-unit homes. This marks a significant departure from the previous multifamily financing requirement of 15-25% down payments for duplexes, triplexes, and four-plexes.
This new policy represents a major breakthrough for aspiring multifamily homeowners, making these properties more accessible than ever before. With the reduced down payment requirement, individuals can now afford to purchase multifamily homes while also enjoying the benefits of homeownership.
Expanded Financing Choices and Easier Approvals
The policy change applies to standard purchases, no-cash-out refinances, HomeReady, and HomeStyle Renovation loans for owner-occupied transactions. This means that first-time buyers and individuals seeking to offset high mortgage payments can take advantage of Fannie Mae’s more accessible financing options.
The maximum loan amount allowed for these 2-4 unit properties is set at $1,396,800, ensuring that larger and more expensive properties can be purchased with flexibility. Additionally, the elimination of the FHA self-sufficiency test for 3-4 unit properties means that buyers will face fewer hurdles when seeking pre-approval for these types of multifamily homes.
Seizing the Opportunity
Mortgage loan borrowers interested in taking advantage of this opportunity can apply now, with the changes set to take effect in Fannie Mae’s system after November 18, 2023. This gives potential buyers a chance to prepare and gather all the necessary documentation before the new policy implementation.
For owner-occupant landlords, this policy shift represents a significant opportunity to reduce mortgage payments by leveraging rental income. The ability to make a smaller down payment not only makes multifamily homes more accessible, but it also allows home buyers to gain valuable landlord experience, as they have the opportunity to collect rent from other units while simultaneously building equity in their own property.
A Path to Homeownership and Financial Security
Fannie Mae’s move to lower the down payment requirements for multifamily homes is a promising step towards improving access to credit and affordable rental housing. With this progressive policy change, the dream of owning a multifamily home and generating rental income is becoming more attainable for mortgage loan borrowers.
This new policy opens up a world of opportunities for aspiring multifamily homeowners, providing a pathway to financial security and the satisfaction of owning a valuable asset. As Fannie Mae continues to innovate and expand its financing options, more and more individuals are empowered to achieve their dream of homeownership.