The good news is that if you plan to live in one of the units, you may be able to get an FHA or a VA loan, and FHA and VA loans are easier to get approved than a commercial loan. If you are looking at a duplex, triplex, or fourplex as both a residence and an investment property, this is a great way to get them approved for the loan. Multi-Family Properties: These properties are where there are more than four units to any one complex. In other words, there is no “fiveplex” — once you go over four units, you now have a multi-family property. Obtaining a loan for a multi-family property is vastly more complicated than any of the “-plexes.” This is because a multi- family property needs a commercial loan instead of a residential loan, even if you intend to live on property. The transaction will not be FHA, VA, Fannie Mae, or Freddie Mac. This is a commercial loan and a whole different ball game. If you are purchasing a multi-family property, make sure the loan officer you work with understands multi-family loans and all the requirements one needs to get the loan approved. Otherwise, you’re better off working with someone else — a different lender who knows what they’re doing and knows the ins-and-outs of this complicated type of loan. Vacant Land / Vacant Lots: One would think that buying a piece of land with nothing on it would be the easiest loan to obtain. However, it’s actually incredibly difficult. Banks prefer not to loan on vacant land because the market is so much smaller. Furthermore, if there are issues after the lot purchase, buyers are more likely to simply walk away because there is nothing there of any material value.
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