A borrower is purchasing a duplex in a high-cost area where the conforming loan limit is $1,149,825. They want to finance $1,100,000. If they plan to occupy one unit and rent the other, what is the maximum number of units this property can have while still qualifying for a conforming loan?
Correct Answer
B) 4 units
For owner-occupied properties with 2-4 units, the conforming loan limits are the same as single-family limits in that area. Properties with 5+ units are considered commercial and don't qualify for conforming financing under GSE guidelines.
Why This Is the Correct Answer
For owner-occupied properties with 2-4 units, the conforming loan limits are the same as single-family limits in that area. Properties with 5+ units are considered commercial and don't qualify for conforming financing under GSE guidelines.
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Previous Question
A borrower refinances their home with a cash-out refinance loan of $750,000. The original loan balance was $400,000, and they're taking $300,000 in cash. If conforming limits allow $766,550, how is this loan classified?
Next Question
A borrower is purchasing a $600,000 home with a first mortgage of $450,000 and a second mortgage of $90,000. They are paying $60,000 down. The first mortgage LTV is 75% and the CLTV is 90%. If the borrower later wants to eliminate PMI, and the property appreciates to $650,000, what would be the new LTV of the first mortgage assuming no principal reduction?