In recent years, the demand for multifamily homes has been on the rise. As more people choose to rent rather than buy, investors have been eyeing these properties as a lucrative investment opportunity.
However, one major barrier for investors looking to purchase multifamily homes has been the high down payment requirement. Most lenders typically require a down payment of 20% or more for these types of properties, making it challenging for many investors to enter the market.
But now, Fannie Mae has announced a new program that may change the game for multifamily buyers. The government-sponsored enterprise (GSE) has introduced a 5% down payment option for borrowers looking to purchase multifamily properties which goes into effect November 18, 2023.
The New 5% Down Payment Option
Under this new program, Fannie Mae will allow borrowers to make a down payment of just 5% on a multifamily property with two to four units with a maximum purchase price of $1,396,800.
The policy change applies to standard purchases, no-cash-out refinances, HomeReady, and HomeStyle Renovation loans for owner-occupied transactions. This means that first-time buyers and individuals seeking to offset high mortgage payments can take advantage of Fannie Mae’s more accessible financing options.
Contact us to see if you qualify!
The Bottom Line
This new 5% down payment option from Fannie Mae is a welcome change for investors looking to enter the multifamily market.
This new program opens up opportunities for buyers who may not have been able to afford a 20% down payment on a multifamily property. With a lower down payment requirement, investors can now enter the market sooner and potentially see higher returns.
However, as with any investment opportunity, it’s important for borrowers to carefully consider all factors and risks before making a decision.
That’s why consulting with one of our experienced mortgage lenders is recommended to find out if this program is right for you.
Contact a member of our team today to start the process!