OfflineOn most investment purchases, such as HUD, VA, and some bank foreclosures, it is still necessary for investors to put down a minimum of 20%. This tends to keep a lot of people who would like to own real estate investments from being able to buy.
However, Fannie Mae, in an effort to clear off their high inventory of foreclosed homes, is now permitting investors to purchase many of their homes with only 10% down. This Fannie Mae program, called HomePath Mortgage Financing, incredibly has no PMI, nor appraisal fee either!
However, they do require 720 credit scores and a debt-to-income ratio of 45% or less. So if you want to take advantage of this great program, begin paying down your debts in order to qualify.
In addition, there will be at least two points (2% of the mortgage amount) paid at closing.
With today's historically low interest rates, and the absolutely decimated prices of foreclosures, the 10% down payment still allows investors to buy investment properties that can easily be cash flowed every month!
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Thanks for the info CFuller!
Also look into some of the VA Vendee properties which come with thier own loans. You don't have to be a veteran to get these loans; many are only 5% down, and the interest rates right now are 5% (these loans are specifically for investors for VA REOs!!!! Unheard of!). There is NO LIMIT to the amount of homes you have mortgages (like regular banks have)
But, like the Fannie Mae loans, you need to have good ratios and credit. That leaves me out because of my ratios.
But, if it can help someone else out... The website I use to find these properties is https://va.equator.com. They require a pre approval letter through BofA for the VA Vendee program. The contact at the bank to get pre approved is Kenny Baron, Bank of America Home Loans, 800-850-7655 Ext 145-0546, kenneth.baron@bankofamerica.com.
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VA Vendee Quick Facts: (Taken from a thread on www.biggerpockets.com )
• Any purchaser can apply for Vendee Financing. You do not have to be a Veteran.
• Vendee Financing is available for non-owner and owner occupied.
• Low Interest Rates
• The seller may contribute up to 6% of the contract sale price for closing costs.
• 2.25% VA Funding Fee
• No pre-payment penalties.
• An appraisal is not required for underwriting.
Non-owner occupied only:
• No maximum number of investment properties.
Vendee financing is a loan product offered to individuals to help finance the purchase of VA REO Properties. Vendee Financing will be offered to both veterans and non-veterans. Some of the guidelines are listed below:
• Seller may contribute up to 6% of the contract sales price to pay for funding fee, closing costs, prepaid and other expenses.
• Vendee mortgages are assumable by qualification.
• Vendee Financing is not a credit score driven product.
• There are two available terms, a 15 and 30 year fixed rate.
Owner Occupied purchase:
• Can be financed with as little as 0% down. The loan amount may be increased up to 2% to finance closing costs, prepaids or other expenses. Funding fee may not be financed.
Non-owner Occupied purchase:
• Can be financed with as little as 5% down. Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment.
• Investors must have experience managing rental properties to include anticipated rent on subject property in underwriting.
• No maximum number of investment properties.
Thank you so much for all this information on the VA loans and properties. This is a great way to start ..... Much Love Styacy
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This is awsome info for a new investor. With this kind of info it shouldn't be difficult to plan for investing. I'm really new to investing, so this is great information to know.
Thanks cfuller and Tammy.
Elaine
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