St. Cloud multi-family housing is the umbrella term covering all the various kinds of residences that shelter more than one family. Everything from duplexes and homes with guest cottages to apartment complexes fall into the category, which is most often thought of in terms of the solid investment potential it represents.
While St. Cloud multi-family housing offers all of the same investment potential and more (the economies of scale can give an apartment building listing, for instance, many times the profit potential of a single family rental), a multi-family residence can also be the pathway to homeownership for a first-time home buyer. You might not think so, but when a prospective buyer will also be resident, standard financing guidelines—even for FHA loans—may apply. The lending particulars vary by a given St. Cloud property’s specifics—among other factors, whether or not cash flow-producing tenants are already in place. But the assumption that the higher mortgage amounts associated with multi-family housing opportunities automatically puts them out of reach ain’t (as the song says) necessarily so!
The NAR® finds that some 38% of residences are purchased by first-time buyers—yet it’s a safe bet that most of them would never consider that purchasing multi-family homes could be a great way to own their first home (and even generate some extra income at the same time). To begin to examine this as a possibility, some basic research into some of the key elements of multi-family financing is a logical preliminary step.
Down Payment Options
Today’s loan requirements may be seeing some degree of easing, but most St. Cloud multi-family homes listings carry bigger down payments than single residences. Even so, some FHA loans for a one- to four-unit home require just a 3.5% down payment. A variety of other loan programs emphasizing affordable down payment options may also apply.
Cash Reserves Requirements
Some traditional lenders have no specific cash reserve requirements, while the FHA has defined guidelines. For one- or two-unit properties, buyers must have one month’s worth of reserves (cash left after closing). For three- to four-unit homes, the requirement is for three months of reserves.
Lenders evaluate debt-to-income ratios to include other monthly debt payments as well as the anticipated mortgage payment. They weigh that against gross monthly income…and, needless to say, lenders who include a high percentage of projected rental income will be more likely to find a loan viable.
Whether you are a first-time or veteran home buyer, considering St. Cloud's multi-family housing listings is an idea that may be worth pursuing. Give me a call to discuss how one of today’s prime offerings might fit into your future!