2 Questions - Section 8 & Equity Lenders
I'm a beginner. I live in 1/2 of a duplex I'm buying and am in the process of purchasing a single family I plan on renting thru the section 8 HUD program. Anyone have any tips or warnings?
Also have found a second single family well under comparibles - however broker tells me can only use selling price for loan. How do I find these equity lenders some of the gurus are towting?
Thanks for any insights!
Screen carefully. Sec 8 generally aren't the cream of the crop tenants. I've had no major problems but others on this site have and can fill you in.
What exactly is your broker talking about??
If your intention is to come in w/ no money down then that will be difficult at 80% LTV. This whole argument from the broker that you need to do 80% LTV to avoid PMI is silly. There are a lot of programs out there for investment property that go 90-95% LTV. If you did like an 80%/ 15% Loan, that would mean you only bring 5% down and because the 1st mortg. is @ 80% you avoid PMI.
And Yes a side agreement outside of closing is considered bank fraud. If whatever you are doing in a transaction does not show up on the HUD Settlement Statement, Bank Fraud.
Be Careful good luck!
I have section 8 tenants in So. Cal. Recently, the budget for HUD - the government group that administers the Section 8 program - experienced a serious budget problem. As a result, in my area, there are no new vouchers being granted. Consequently, it is now harder to find a section 8 tenant, because you have to find someone who is moving from a differnt unit who already has a voucher.
Call your local Housing Authority and talk to them about their budget status - mine also offers quarterly new-owner seminars which are very helpful.
All in all, it has been good having section 8 tenants. It is nice to get that direct deposit before the first every month.
Thanks for the info. I'll give them a call and ask about budget and new landlord seminars. Thanks Again!!