Listing Courtesy of JOE MAGGIO REALTY
Lewes 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 Lewes 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 Lewes 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 Lewes 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.
· Debt-to-Income Ratio
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 Lewes'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! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestate.com.
Some predictions for New Year 2018 may be controversial, but one trend is beyond question: almost every sector of everyday life in Delaware will continue to be transformed—either incrementally or massively—by automation of one sort or another.
Hordes of self-driving cars and trucks aren’t likely to take over Delaware streets this year, nor will Robocops start patrolling our neighborhoods. But one area that’s being affected more quickly than expected comes in the realm of Delaware real estate appraisals.
Needless to say, since Delaware appraisals establish the collateral value of any piece of real estate, that’s a change that could affect both Delaware home buyers and sellers. Our human expert appraisers won’t soon to be out of a job, but when it comes right down to it, the semi-governmental duo of Freddie Mac and Fannie Mae are now beginning to tilt toward accepting a robot’s word for it. As The Washington Post headlined, “Fannie and Freddie say appraisals are not always necessary.”
Without getting too far into the technical ins and outs of home appraisals, Fannie and Freddie have been rolling out versions of ACE (Automated Collateral Evaluation) models for transactions that qualify for certain mortgages. They say it calls on “big data and advanced analytics”—buzzwords that signify machines that promise to be smarter than we are. Since they are able to integrate more than 40 years of historical data, they might have a point.
In practice, a buyer in qualifying transactions is offered the option to purchase a house without having to pony up hundreds of dollars for a human-generated real estate appraisal. If the offer is accepted, an automated evaluation is produced electronically.
The upside is that not only is the appraiser’s fee avoided, but closing times can be reduced by as much as 10 days since the services of Delaware real estate appraisers are always in high demand.
The downside is that the buyer is not afforded the protection that comes with an in-person visit by an experienced Delaware real estate appraiser, whose eyes and ears aren’t duplicated by a data-only approach. As you would expect, the Appraisal Institute takes that view, arguing that Fannie’s and Freddie’s programs “create unnecessary and unacceptable risks for taxpayers and homeowners…”
It’s my job to shepherd you through all the stages of the home buying and selling process—which, in 2018, increasingly involves a rapidly evolving mix of automated and traditional processes. Call me! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.