Major milestone for “missing middle” housing

Things just got a little bit easier for people like you and me who might want to invest in developing “missing middle” housing in our neighborhoods.

The following post is from Eric Brown, one of my co-authors of the FREE book. (You can visit his Facebook page Growingfree SimpleLife here.)

This is a HUGE Deal,……Can’t Afford a Single Family Home? Buying a 2-4 Plex Got Easier in 2023!

Important #missingmiddlehousing milestone: In 2023 Fannie Mae Made Missing Middle Easier to Finance, Requiring Only 5% down on 2-4 Plex Mortgages

Article Highlights:

This new option presents a great opportunity for individuals looking to invest in multifamily homes while also enjoying the benefits of homeownership.

Fannie Mae has announced that, starting from the weekend after November 18, 2023, it will accept 5% down payments for owner-occupied 2-, 3-, and 4-unit homes. This marks a departure from the previous multifamily financing requirement of 15-25% down payments for duplexes, triplexes, and four-plexes.

The maximum loan amount allowed for these 2-4 unit properties is set at $1,396,800….

Additionally, the elimination of the FHA self-sufficiency test for 3-4 unit properties means that buyers will face fewer hurdles when seeking pre-approval for these types of multifamily homes.

For owner-occupant landlords, this policy shift represents a significant opportunity to reduce mortgage payments by leveraging rental income. The ability to make a smaller down payment not only makes multifamily homes more accessible, but it also allows home buyers to gain valuable landlord experience, as they have the opportunity to collect rent from other units while simultaneously building equity in their own property.

Here’s the full article Eric was describing:

Someone in a different Permaculture group where I shared Eric’s post made a comment that sounded like they were questioning the relevance of this post to Permaculture. They typed “Relevance? Admin.”

Not sure what they meant by this question. I suspect they are questioning its relevance to permaculture because they think Permaculture is just about gardening? (That’s a very widespread and persistent misconception.)

BUT! One of the most important aspects of Permaculture is where we bank, how we invest, how we spend our money.

Also, housing is one of the core aspects of permaculture. It’s one of the basic human needs.

I immensely appreciate this post. Housing is a really serious issue, and the missing middle is a big part of the solution.

Another really serious issue is how much of everyday people’s money is parked on wall street (in the form of 401ks etc). Regenerative, community-building Investment options such as “missing middle” housing can help solve this draining of money from communities as well.

BTW one thing notable about this policy change making it easier to get loans for missing middle housing, is that it applies to owner-occupied missing middle housing. There is a great qualitative difference, in terms of communiy cohesion, between owner occupied rental housing, and not owner occupied.