Some of you may have seen my post a few weeks ago asking how much to put down on my first house hack.
Today, I pulled the trigger on pre-approval. I called up two local banks that were recommended to me as having the best financing. Told them that I'm seeking pre-approval for financing for a duplex or triplex which would be used as both a rental and my primary residence.
Bank A tells me that they can do the financing in house at 4% interest on a 30 year fixed loan. Not bad, but I asked if that's their prime rate, because I've heard people here and elsewhere say they got approved at closer to 3% in recent months. They told me that 4% is their best rate for in house, and that because I'm looking at multi-unit properties, I wouldn't have access to the "secondary market". I have no idea what that term means; I've never encountered it before, but far as I can tell it offers better financing options in terms of interest and minimum down payment, but apparently excludes rental properties even if they are owner occupied.
Bank B tells me basically the same thing, except with the added twist that "3-4 unit homes have to be financed as investment properties, with a minimum of 25% down." I reiterated that I will be living in the property as my primary residence, and they said that they'd check to make sure, but they don't believe that makes a difference. A duplex would apparently qualify for traditional financing, according to them.
Are these banks right? If so, is all the information I've picked up here and elsewhere on FI and Real Estate blogs wrong? I know for certain I've heard multiple experts say that living in the property allows you to get around the investment property financing limitation. I was really planning to use a low down payment to leverage my returns and free up more funds for future investments, but now it's seeming like that may not be an option.
Any answers or insight appreciated!