Is the down payment boogeyman haunting your homeownership and investment dreams? Investing in real estate can be daunting with the steep down payment requirements on owner-occupied 2, 3, and 4-unit buildings. However, Fannie Mae drastically reduced those down payment requirements to finally put the down payment boogeyman to rest. Here’s what to know about Fanny Mae’s down payment policy shift and how it can help you reach your homeownership and investment dreams.
Benefits and Barriers to Purchasing Multi-Family Dwellings
Owner-occupied multi-family dwellings can be an excellent investment that allows owners to simultaneously earn income as a landlord while enjoying the benefits of homeownership. Some homeownership perks include:
- Building equity in your home
- Long-term savings options through home equity
- Growing wealth through passive income
- Controlled cost of living
- Strengthen credit history with on-time mortgage payments
Despite the benefits of purchasing an owner-occupied multi-family dwelling, some potential buyers have been discouraged by the current down payment requirements of 15% to 20%. Another barrier home buyers searching for multi-unit homes face is the typically higher cost related to scarcity in the market for this home type or higher home prices.
Fanny Mae’s Down Payment Policy Shift
Fanny Mae released news of an upcoming policy shift that may help home buyers overcome the obstacles of purchasing an owner-occupied 2, 3, and 4-unit dwelling. Starting the weekend following November 18, 2023, the required down payment amount will be reduced to 5% instead of the standing 15-20% down payment requirements. This shift can increase affordability and access to homebuyers.
In fact, the benefits of this policy shift are two-fold. Home builders may view home construction projects for multi-family homes as valuable projects due to more customers having access to purchase them. New construction projects and increased affordability of existing multi-family dwellings can help combat market scarcity.
Getting Started with Fanny Mae’s Down Payment Policy Shift
While the policy shift doesn’t take effect until November, interested homebuyers can start by contacting their trusted mortgage lender today. Your mortgage lender can review program qualifications and guidelines to match you with the best program for your home buying goals. Starting today also allows you time to get documentation and paperwork together to obtain pre-approval to confidently search for multi-family homes with a price range in mind.
The down payment boogeyman doesn’t need to haunt your homeownership and investment dreams. By talking to your trusted mortgage lender, you can determine if Fanny Mae’s policy shift can help you reach your goals!
About Michigan Mortgage Lender, Julie Krumholz from Superior National Bank
Interested in purchasing a multi-family home? Julie Krumholz from Superior National Bank can help!
With over 35 years of experience in the mortgage industry, Julie Krumholz is a trusted resource and friend to homebuyers and can match them with the best programs for their needs. Julie has worked in processing, closing, loan origination, underwriting, and QC auditing and has even co-owned a mortgage brokerage firm. Julie applies her knowledge to help first-time and seasoned homebuyers with a seamless homebuying experience.
