Unfortunately no not at this time. The minimum down payment to purchase an investment property is 20% down and this cannot be gift funds either, this has to be the borrower’s own funds. Don’t have the full 20% down needed to make the deal work?, Depositing the money into a bank account, letting it sit there for a minimum of 60 days in order to meet the lender seasoning requirement, will take care of this concern that otherwise would inevitably halt a transaction. Moreover, purchasing investment property with 20% down, the gross fair market rents can be used to offset the new monthly mortgage payment. In other words less income is needed to qualify for the same amount of money borrowed.
For example if your purchasing a home for $300,000 in the monthly payment is $1800 per month, and fair market rents support a gross rent payment of $2300 per month, using a 25% vacancy factor that will translate to a new monthly debt of $75 per month. 75% of the gross fair market rents, less the house payment translates to a $75 per month liability. A $75 per month liability is substantially easier to manage with income, than an $1800 per month liability.
20% down versus 25% down
Main difference: putting the extra 5% down for a total down payment of 25% does provide a lower-cost mortgage then putting down the traditional 20%. Fannie Mae and Freddie Mac have a larger appetite for 75% loan to value investment property type transactions than they do for 80% loan to value transactions.
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