Starting on November 18th, Fannie Mae is introducing a new opportunity for prospective homebuyers, giving them the ability to purchase 2-4 unit properties with a 5% down payment through a standard conventional loan. It's crucial to emphasize that the property in question must be the borrower's primary residence, making this a particularly appealing option for those seeking to live in one of the units.
This development carries significant weight when comparing it to FHA loans. While FHA loans have long been sought after for their low down payment requirements on multi-unit properties, Fannie Mae's conventional loan goes a step further by eliminating the initial Mortgage Insurance Premium (MIP), which is typically a prerequisite for FHA loans. This alteration provides homebuyers with an attractive alternative to secure multi-unit properties with a reduced upfront financial burden.
To elaborate further, we asked Corey Scott of The Corey Scott Team at HarborOne Mortgage for more info. He kindly sent in this video to help explain the change and what it means for buyers in the market for multi-units!