Good news! Fannie Mae, the government-sponsored enterprise that provides liquidity to the mortgage market, has recently announced a new program that allows homebuyers to purchase multifamily properties with as little as a 5% down payment. This new program is aimed at making it easier for individuals to invest in rental properties and generate passive income.
The 5% down payment option is available for both fixed-rate and adjustable-rate mortgages on 2–4-unit properties. This means that individuals can purchase duplexes, triplexes, and fourplexes with a lower down payment than what is typically required for single-family homes. The program also allows for non-occupant co-borrowers, which means that individuals can team up with family members or friends to purchase a property together.
How to Qualify
To qualify for the program, borrowers must have a credit score of at least 680 and a debt-to-income ratio of no more than 45%. The property must also be located in a designated low-income census tract or be affordable to families earning up to 80% of the area median income.
Fannie Mae’s new program is expected to make it easier for first-time homebuyers and low- to moderate-income individuals to invest in rental properties and build wealth through real estate. It also provides an opportunity for current homeowners to purchase additional properties and diversify their investment portfolios.
Risks and Opportunities
However, it’s important to note that investing in rental properties comes with its own set of risks and responsibilities. Property owners must be prepared to handle maintenance and repairs, find reliable tenants, and navigate local landlord-tenant laws. It’s also important to have a solid financial plan in place to ensure that the investment is profitable in the long run.
Overall, Fannie Mae’s new program is a positive development for individuals looking to invest in real estate. By allowing for a lower down payment on multifamily properties, the program opens up opportunities for more people to build wealth through rental properties. However, it’s important to approach real estate investing with caution and diligence to ensure a successful outcome.
If you or a loved one is looking to invest in a multi-family property, please reach out to our team, the Brazoban Realty Group can assist in finding the right property and connecting you with a lender that specializes in these types of loans.
