Minimum Contribution from Borrowers Own funds on a 2 to 4 Family Unit
Updated: 11/05/2018
Article #: 146
Original Question:
I know that a 3% investment from the borrower on a 2 unit property is required under conventional financing but if we had a borrower that is wanting to purchase a 2 unit property and go FHA and plans on receiving a gift does he/she still need to contribute 3% of his/her own funds?
FNMA: There is a 3 percent minimum borrower contribution on 2- to 4-unit HomeReady properties with LTV ratios exceeding 80 percent. Standard business requires a 5 percent minimum borrower contribution. There is no minimum borrower contribution if the LTV is 80 percent or less on either HomeReady or standard business.
FHLMC: There is no minimum borrower contribution from own funds on a 2 to 4 unit property.
FHA: Borrower must have 3.5% of their own funds on a 2 to 4 unit property.
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