Question 1

Can I use the 5% down rule on an investment property I won't live in?

Accepted Answer

No. This specific 5% down option is exclusively for owner-occupied primary residences. Non-owner occupied investment properties typically require a 20% to 25% down payment.

Question 2

Is private mortgage insurance (PMI) required with 5% down?

Accepted Answer

Yes, conventional loans require PMI if your down payment is less than 20%. However, conventional PMI can be cancelled automatically once the property reaches 80% loan-to-value (LTV) through monthly principal paydown or market appreciation.

Question 3

How do underwriters verify projected rents for vacant units?

Accepted Answer

The appraiser will complete a Comparable Rent Schedule (Form 1007 or 1025) during the property appraisal. They analyze local market data to establish the fair market rent for the units, which the underwriter uses to calculate your income boost.

Question 4

Does this conventional program work for VA buyers?

Accepted Answer

Veterans have access to an even more powerful tool: VA loans allow for 0% down on 2-4 unit properties, provided the Veteran occupies one unit. See our VA loan guide for more details.

Day: June 20, 2026

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