2-4 Fannie Mae lending
Great news, starting in November, Fannie Mae will allow 5% down on 2-4 units. In the past, you needed 15% down on 2 units and 25% down on 3 & 4. This applies to owner occupied only, and within the national conforming loan limits.
This massively increases the ability for Buyers to be able to evaluate 3 & 4 units as options. FHA allows 3.5% down on 2-4 units, but 3 & 4 units have to pass a self sufficiency test which most properties in San Diego do not meet. Therefore in the past you needed hundreds of thousands to buy most 3 & 4 unit properties. More on buying 2-4 units here and how the income on the rental units helps you qualify.
FHA & ADUs
FHA will now allow existing ADU income to count towards qualifying for a mortgage. This means 75% of the income of the ADU can count as income towards qualification. Previously this income rule only applied to legally designated 2-4 units.
Building or converting a garage to an ADU
Are you thinking about building an ADU? SANDAG put together an ADU report for the County. The City of San Diego by far had the most ADU’s permitted over the past 5 years.
San Diego Housing Commission ADU Construction Loan
If you want to build an ADU within the City of San Diego, and you qualify based on income limits, you may be able to obtain 1% financing through the SDHC ADU Finance program for up to $250,000.
This very low rate is during the construction phase, but upon completion, you must refinance into a permanent mortgage.