Fannie Mae and Freddie Mac requirements are discussed in detail during this episode as they pertain to the “Buy, Occupy, Rent” strategy that we teach to our listeners and workshop attendees.
Some of the benefits of these programs include a low down payment requirement and forgiving credit requirements. Frank discusses the fact that interest rates on owner occupant programs are generally lower than the interest rates offered to investors.
VA home loans provide US Veteran investors (who wish to live in the future investment property for at least one year) a true ZERO Down Payment opportunity. This is a powerful strategy that when executed properly can launch an investor right out of the rat race in short order.
Both FHA and VA owner occupant programs allow for financing up to 4 units at one time. These programs provide the investor with free rent and positive cashflow assuming they are working with an experienced agent negotiating for them. Frank discusses common misconceptions regarding institutional lending solutions and provides tips on how to best position yourself to get approved for a home loan.
For those who wish to invest in the State of Florida, Lincoln Lending offers a NO FEE lending experience which helps investors retain more cash that can be use to make a property rent ready.
When purchasing multi family property, Frank discusses how the banks allow the income generated from an investment property to be credited at a rate of 75% of the income the property generates. Any income over the mortgage payment can be applied to offset other expenses that would normally count against your qualifying debt to income ratios.
The owner occupancy requirements for VA and FHA loans are meant to be followed, Tyler and Frank discuss issues that have arisen by borrowers failing to abide by these requirements.
Private money lending is also an option available from many companies that have far fewer requirements that traditional “bank loans” Private money a/k/a “hard money” is available for both short and long term investment opportunities and is focused more on the asset than the borrower. This fact makes it easier to meet the qualification standards provided you have negotiated a good deal that makes sense.