Can you buy a duplex with no money down?
Buying a duplex can be one of the smartest ways to get into real estate, especially if you are a first-time homebuyer or someone trying to lower your monthly payments.
Most people don’t know this but you may be able to buy a two-unit property, known as a duplex, live in one unit while renting out the other unit and use a down payment assistance grant for duplexes which we have available here at Andes Mortgage to help cover your down payment or closing costs.
This is a really smart strategy because instead of buying a single family home, where you have to shoulder the entire mortgage yourself, with a duplex, you can get generate some income by having a tenant help you offset the payment.
In the industry, we call this strategy house hacking, and for the right buyer, it can be a powerful way to start building wealth through real estate. By using our down payment assistance grant for duplexes, you further hack the strategy because you can get funds up to 3.5% to cover your down payment.
Eligible first-time homebuyers may be able to qualify for our 3.5% down payment assistance grant.
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How Buying a Duplex With a Grant Could Work
Let’s use a simple example.
Say there is a duplex in your area listed for $375,000. With an FHA loan, the minimum down payment required is 3.5% of the price of the property equivalent to $13,125.
Closing costs can easily run you another $7,000 to $10,000 on a property with a price like this one, assumimg you have to take on the entire cost without any seller concession, you would need to come out of pocket with around $20,0000 to $23,000.
But thanks to Andes Mortgage’s down payment assistance grant for duplex, you can get up to $13,000 toward your down payment, and that could make a major difference in how much money you need to bring to closing.
Our clients are able to use the grant and receive up to 6% seller concessions for their closing costs. For many clients who we have helped in the past, this down payment grant has been able to get them into a house with little to no money out of pocket.
You Have to Live in One of the Units
One of the main requirements to qualify for Andes Mortgage’s down payment assistance grant for duplex is that you need buy the property as your primary residence.
You simply can’t buy the property as an investor, collect rent from both units immediately, and be able to use this grant.
You must, with no exceptions, live in one of the units for a period of at least 12 months.
So the strategy looks like this:
You buy the duplex.
You move into one unit.
You rent out the other unit.
The rent from the second unit helps offset your monthly mortgage payment.
Then, after satisfying the occupancy requirement, you may have more flexibility to move out and rent both units, depending on the loan terms and program rules.
FAQ about our down payment assistance grant for duplex
Do I have to pay the down payment assistance grant back
We offer both repayable and forgivable down payment assistance grants. On our forgivable grant, you are only required to make 6 total mortgage payments and the down payment assistance is forgiven afterwards.
How much down payment assistance can I get?
Our down payment assistance grant for duplex can give up to 3.5% of the sales price for funds.
Do I need to be a first time homebuyer to qualify for your down payment assistance grant?
Typically you do have to be a first-time homebuyer in order to qualify but we have other down payment assistance options for repeat buyers as well.
What is the minimum credit score to qualify for the down payment assistance grant for duplex?
You must have a minimum credit score of 640 in order to qualify for our forgivable grant.
However, we offer other down payment assistance loans with as low as a 600 credit score.
