I showed a gorgeous duplex in southwest Minneapolis to some first time home buyers last weekend. It was one of those big, sweeping properties many of us have often driven by and wondered whether the inside was beautiful as the outside.
The people I showed the house to were surprised to learn they could actually get an FHA loan for a duplex. Or a triplex. Or even a fourplex. But they’re not alone. Most people don’t realize that small, multi-family properties are viewed by the banking industry much the same as single family homes. And FHA insures the financing. Of course, this benefits only those who want to owner occupy a multi-family property.
As with single family homes, FHA has temporarily raised loan limits on multi-family properties. In the Twin Cities metro area, current loan limits are:
Duplex (Two Unit) – $467,250
Triplex (Three Unit) – $564, 800
Four Unit – $701,900
In other words, a buyer could purchase a $481,000 duplex with just the required FHA 3 percent down. Or less. But I’ll talk about that tomorrow.