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Sonoma County Mortgages

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Duplex Loans, 2-4 Units, Multi-Family Mortgages

Single family homes, condominiums, planned unit developments….. and then there’s 2 to 4 unit properties, often called duplexes, triplexes and fourplexes. A 2-4 unit property is the oddity of the various property types, it’s this property type that has the most confusion when it comes to securing mortgage loan financing.

A 2-4 unit property is a quasi mini-apartment complex however, it still considered to be a residential and as a result, is eligible for premium fixed-rate mortgage loan financing through Fannie Mae and Freddie Mac.

*For our purposes, a unit is defined as an area that contains at least one bedroom, a full working kitchen and a bathroom. As long as a unit has these three components it’s considered to be a unit for income qualification purposes so long as the property is zoned as one of the following:

  • two units
  • three units
  • four units

*Mortgage Tip: If the property is zoned as a single-family, the single-family zoning takes precedence even it there is a granny unit and the income from the granny unit cannot be used to secure the loan.

Following are unique characteristics of duplex loans and 2 to 4 unit financing..

*Whether purchasing or refinancing, the interest rate and/or costs are the loan will always be a bit higher on any property with more than one unit when it comes to securing a mortgage. Fannie Mae and Freddie Mac charge a risk-based premium into how these loans are priced and as a result the rates are always going to be higher on multiple unit properties down a single-family residence.

*The income from the additional units can be used to help you qualify for purchasing or refinancing the property. In other words, 75% of the gross rent received per unit can be used to offset the total monthly mortgage payment in qualifying for the loan.

*2-4 Unit appraisals cost more because comparable market surveys have to be included for the additional units. If the additional units are not presently rented, income can still be used for these units because the use is income producing. Lease agreements will be requested for each occupied unit.

Mortgages for multi-unit properties including Santa Rosa, California

If you’re looking for the opportunity to reduce your house payment by virtue of renting out the other unit, a multifamily property is an ideal choice.

Following are the appropriate mortgage types for such properties..

Conventional Mortgage-can purchase a multiunit property with the standard conventional mortgage with 10% down, and monthly mortgage insurance so long as the property is your primary residence. If the properties for investment purposes, you’ll need 25% down and fair market rents can help offset the mortgage payment.

FHA Mortgage-as little as 3.5% down as long as the property will be your primary home.

Find more information about Purchasing or Refinancing a mortgage today!

 

 

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Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
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Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

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