How Congress Could Stop You From Buying A Duplex

What does the end of the federal government’s fiscal year have to do with buying a Minneapolis duplex?

Your ability to get a loan.

If you’re thinking about owner occupying a duplex, and intend to use FHA insured financing (which requires just a 3.5 percent down payment), it’s important to know two things.

First, barring Congressional action, the maximum duplex loan amount FHA will in insure after October 1, 2011, in Anoka, Hennepin, Ramsey, Dakota, Carver, Chisago, Scott, Washington and Wright counties will be reduced to $311,632.

Meaning if you only have a 3.5 percent down payment, the maximum you can pay for a duplex will be $322,539.

Right now, that figure stands at $483,604, with a maximum FHA loan amount of $467,250.

Second, if you write an offer for a duplex before the September 30th deadline, but intend to close on it some time after that date, you won’t be able to lock an interest rate if the loan amount exceeds the $322,539.

Of course, with the majority of today’s loans being FHA insured, this throwback to 2008 might impact the amount sellers are able to get for their property as well.

Do I think Congress won’t take action on this? No.

Then again, I thought the government of the state of Minnesota wouldn’t shut down either.