You’ve finally decided that it’s time you start being a landlord (or landlady) of your rental properties. You’ve been a renter for quite some time now, and you’ve realized that it can be a lucrative venture.
There are many different questions that most likely have popped into mind already, but in general, they all point towards the same direction: how can you finance the purchase of a property that may cost you even more than an average home?
Answering the multifamily dollar question
Unless you have millions and millions in your bank accounts that you can immediately use for purchasing multifamily properties, your next best option is to take out a loan. You have several choices when it comes to such programs, some of the best ones of which fall under the FHA multifamily financing service. These loans, insured by the Federal Housing Administration, are quite popular, especially those that specifically cater to first-time home buyers.
There are plenty good reasons for their popularity, and in many cases, the same reasons apply to their multifamily programs.
Why take out a multifamily loan in the first place
At its core, multifamily financing offers borrowers with mortgages they can use to purchase multifamily properties. These properties, often having two to four units or larger apartment buildings with more units, offer a great investment tool for both seasoned and first-time investors, since it can give them the best of both worlds: property ownership and a reliable source of income (from the rental payments).
Going FHA for improving chances of qualifying for a loan
While you do have several other options when it comes to sourcing the funds for your purchase, none can beat the ease of qualifying for an FHA loan.
Because the government backs these loans up, it assures the lenders that they can retrieve their money just in case the borrower defaults on the loan. With the government backing the loans up, they feel more inclined to say yes to applicants. Hence, you’ll have higher chances of qualifying for the multifamily loan.