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UP2 FAQ: Rental Property Financing

Q. What types of investment financing does AmeriFund provide?

A. AmeriFund provides permanent financing on loans secured by 1 to 4 unit residential investment properties and condominium units in qualifying projects.

Q. Can AmeriFund provide financing to investors that own multiple investment properties?

A. AmeriFund can provide financing secured by an eligible property to investors that own up to 10 properties secured by a 1 to 4 unit residential property, including condominium units.

Q. I own 11 total rental properties but only seven have financing.  Can I obtain a loan from AmeriFund?

A. Yes. The 10 property limitation only applies to financed properties. You could finance up to three more properties.

Q. I own four properties but two are 4 unit properties. I have a total of ten units. Can I obtain a loan from AmeriFund?

A. Yes. The 4 unit properties are counted as a single property. You could finance six additional properties.

Q. Are there additional requirements for investors that seek to acquire multiple properties.

A. Yes. An investor that will own more than four financed properties at the completion of the transaction (including the subject property) will be required to document additional assets for reserves.  Generally, an investor seeking financing that owns or will own more than four financed properties will be required to have reserves for each property equaling six (6) times the housing expense on each property.  The housing expense for a property on which an escrow account for payment of taxes and insurance is maintained with the loan servicer for that property is the amount of the payment plus any association dues or other assessments that are not paid from the servicer managed escrow account. For properties on which taxes and insurance at not escrowed, the housing expense also includes 1/12th of the current annual property taxes and the annual premium on hazard insurance for those properties. Other limitations may also apply for investors that own more than four financed properties.

Q. I want to acquire a duplex. I plan to live in one unit and rent out the second unit. Is that a problem?

A. No. In fact. That transaction will be treated as a purchase of a primary residence.

Q. My income will be insufficient to acquire the 2 unit property (duplex) unless I am able to use the income I will acquire in the future from renting the second unit.  I don’t have a tenant ready to rent yet.  How can I qualify?

A. The potential rent from renting the second unit will be determined by the appraiser and you can qualify with the amount the appraiser determines is reasonable for renting that unit.  The same rule applies to acquiring any rental property. You will be able to utilize the appraiser’s opinion of a fair rental amount to qualify on a property you are purchasing.

Q. Do you do investment loans on condominium units?

A. Yes. However, the project in which the property is located must meet agency eligibility criteria. Consult with an AmeriFund loan consultant to ascertain the criteria and other requirements.

Q. What’s the minimum down payment on an investment property loan?

A. We can provide financing on a standard conventional purchase transaction secured by a investment property with a down payment as low as 20%.  However, we recommend that an investor put a minimum of 25% down on any rental property purchase to avoid oppressive Fannie Mae loan level pricing adjustments for loans with a loan to value ratio greater than 75%.  Utilizing AmeriFund’s Texas 2-Step, an investor can finance the acquisition of an eligible property without a down payment limit.  If the transaction meets the criteria an investor could obtain a property without any cash investment.