If you have been looking to "house hack" and get through life mortgage and rent free, here is your sign as they say. I heard about this through some lenders I work with, and read this article from the Mortgage Report for more information.
The article says that starting the weekend after November 18, 2023 Fannie Mae will accept loans with a 5% down payment on 2, 3, or 4 unit homes that are owner occupied. This used to require a 15 to 25% down payment. For those who are unsure of what owner occupied means, it means that the person who takes out the loan would need to live in one of the houses 2 to 4 units. This means that while you would be a landlord and have tenants, you would also have your own home cost taken care of. In scenarios where people are really trying to cut costs, offsetting your own mortgage or rent cost by having someone else pay for your mortgage, and then making additional rent above what the mortgage cost is seems like a good win. That is what has been termed as "house hacking".
It is no secret that Real Estate has created a lot of wealth for people over the years, and this is one such way to create that wealth. In the past, I have read about people buying their home this way, renovating unit by unit and placing tenants, and then doing a cash out refinance. Now they have their down payment to get a new FHA loan to purchase their next property and do it again. You can reuse your same money over again in some ways to help grow your Real Estate portfolio more quickly. That strategy can also be used with a conventional loan, you just need more cash up front to do it.
If you are interested in checking out lender options, looking at houses, or talking Real Estate, we are happy to have those conversations. Give us a call.