- Investment Property
An investment property is a property that is not occupied by the borrower as a principal residence or as a secondary residence. Investors interested in purchasing an investment property using FHA-insured mortgages can do it for the following reasons:
A. Purchasing HUD Real Estate Owned (REO) properties. Owner occupancy is not required when the jurisdictional HOC sells the property and permits the purchaser to obtain FHA-insured financing on the investment property.
B. Underwriting Considerations:
1. Individual investors who credit qualify may assume mortgages made on investment properties. This applies to properties purchased before the 1989 ban on investors that have been subsequently streamline refinanced.
2. Qualifying ratios, the treatment of projected rental income, etc., need to met
3. ARMs and graduated payment mortgages (GPMs) are not permitted on investment properties.
Except for streamline refinances in which the mortgage was originally insured in the name of a business, FHA will not insure loans made solely in the name of a business entity (such as a corporation, partnership, or sole proprietorship) or trust. One or more individuals, along with the business entity or trust, must be analyzed for creditworthiness. The individual(s) and the business entity or trust must appear on the mortgage note. The business entity, trust, or individual(s) may appear on the property deed or title. All parties appearing on the property deed or title must also appear on the security instrument (i.e., mortgage, deed of trust, security deed).
This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by SimplifyEm Pay Rent Online and Property Management Software
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Investment Property is brought to you by SimplifyEm Pay Rent Online and Property Management Software
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