Multi-Family Home Loans in New Hampshire

Who offers multi-family home loans in New Hampshire?

Tom MacDonald, a loan officer with Elite Mortgage Group (a mortgage broker in Milford, NH), arranges loans for 2 to 4 unit homes in New Hampshire, for buyers who'll live in one unit and for investors through the lenders Elite works with. As a broker, Elite compares options from 45 lenders, so Tom can match the loan to the property and your plans. Each lender sets its own terms.

Why buy a 2 to 4 unit home?

Southern New Hampshire cities such as Manchester, Nashua and Concord have many two- to four-unit buildings. When you live in one of the units, the home is your primary residence, so owner-occupied financing such as FHA, conventional and, for eligible veterans, VA loans can be used instead of investment property loans. That can mean a lower down payment than many investment loans.

Owner-occupied loans require that you plan to live in the home. Your loan documents spell out the occupancy terms.

How can rent from the other units count?

Lenders can count rent from the units you won't live in as income, which may help you qualify:

• FHA. HUD allows rental income from a two- to four-unit home to be counted. With no rental history, the appraisal includes a market rent estimate for the units. With a rental history, the lender uses your last two years of tax returns with Schedule E.
• Conventional (Fannie Mae). Rent can be documented with the appraisal's rent schedule or leases, the rent is added to your income and the full payment counts in your monthly debts. Whether you've managed rentals before can change how the rent is counted.

What extra checks apply to 3 and 4 unit homes?

For three- and four-unit homes, HUD requires FHA borrowers to have cash reserves equal to three months of mortgage payments after closing. Every lender looks at the condition of each unit, and the appraisal covers the whole building.

Owner-occupied or investment loan?

If you won't live in the building, it's an investment property, and loans such as conventional investment loans or DSCR loans apply instead. Investor and self-employed options explains how those compare.

What changes when you become a landlord?

Existing leases usually stay in place when the building sells, so ask for copies of every lease, the rent roll and any security deposits the seller will transfer to you at closing. Many New Hampshire multi-families were built before 1978, and federal law requires the seller to disclose any known lead-based paint and give you a chance to test before you are bound. Plan for a separate landlord insurance policy, and keep repairs and vacancies in your budget so one empty unit doesn't strain your payment.

How do I run the numbers?

Start with the payment calculator using the town's tax rate, then compare that payment with realistic rents for the other units. Tom can lay out FHA, conventional and VA side by side for a specific building before you make an offer.