10:00 · what I do
The three-decker, and everything like it
Buying a two-, three- or four-unit and living in one of them is the most Rhode Island way there is to own a house. It is also the file most brokers quietly steer people away from, because it takes longer. I like them.
Where this one goes wrong
Three things worth knowing before you are under contract, rather than after.
Rental income is discounted, not counted
Most agency programs count roughly 75% of market or lease rent, and the appraiser’s rent schedule usually beats the seller’s spreadsheet. Budget for the haircut before you fall in love with the arithmetic.
Reserves get real above two units
Three- and four-unit files usually want several months of payments held in reserve after closing. It is a common reason a file that looked fine on income stalls at the last minute.
The self-sufficiency test
On some three- and four-unit programs the rents alone must cover the full payment. It is a pass/fail that has nothing to do with your income, and it is worth checking before the inspection money is spent.
Illustrative throughout. Percentages and thresholds named on this page describe how these programs generally work, not a commitment about your file. Program rules change, lenders add their own overlays, and nothing here is an offer to lend or a rate quote.
Also
Other files I take
- 11
Self-employed, 1099 and seasonal income
If you run something, an underwriter is going to read your tax returns differently from the way your accountant wrote them.
Read more - 13
Refinance, cash-out and the break-even
A refinance is only ever worth it against a specific date: the month the savings have paid back the costs.
Read more
Reach me directly
Talk about a two to four units file
Whatever stage you are at. If it is a house you have not seen yet, that is the useful time.
- Fastest(401) 555-0128Call or text. It rings on one phone.
- Writtennadia@botelho-mortgage.exampleReplies weekdays, usually within a couple of hours.
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