Product: Mortgage

I am currently under contract on a 4 unit multifamily property in a high desirable area in Washington DC. My wife and I are currently living in my wife 's condo she owned before we were married temporarily as we just sold our townhome. I applied to Home Point Financial around XX/XX/XXXX for an FHA loan at an offered 2.25 % interest rate, with 5 % down. We did not complete the package until some time later after getting a contract signed for the property, but was completed around XX/XX/XXXX and we awaited further instruction. 

On XX/XX/XXXX, we were informed by email that our file had been approved by underwriting and they will reach out with anything needed further toward closing. We did not hear anything at all for several days and decided finally on XX/XX/XXXX to check in on things. It became clear that the processing department had not done anything and now immediately needed several more documents from us. The underwriter requested many of the documents already provided to include mortgage statements of our other properties ( all conventional loans ), tax returns, HOA information, etc. They also requested we provide a Motivation Letter to explain why we were moving out of our condo that we " just purchased. '' We clarified that my wife has owned this property since 2017 and the recent move was temporary. 

On XX/XX/XXXX, we were informed that the head underwriter reviewed the appraisal of the property and unfortunately would not approve the loan as a primary residence. They offered an investment loan at 20 % down at 3.625 % and XXXX point. The explanation was : " The borrowers are moving into a 4 family home in need of great repair while moving out from a high end condo that they just moved into 6 months ago. Prior to that the borrowers lived in another very nice townhome. 

The current residence is closer to the borrower 's job then ( than ) the subject property as well.

The appraisal made it so much worse. The unit is smaller and far less desirable. The finishes of the condo are too superior to support owner occupancy. We will not be moving forward with this as FHA owner occupied. '' We responded with a letter explaining the many errors in that assessment, to include that I would be 1 ) cutting my commute in half ( and my wife 's ), 2 ) well aware that the finishes need work but the
area is MUCH more desirable and this was to be a property we would make beautiful and 3 ) we 100 % intend to live in the unit as we already contacted architects to write up plans to expand and renovate the property.

The response to this letter was simply this : " None of the information of documentation supports a reasonable belief that they will be occupying the subject as their primary. '' I would be more than happy to provide the letter that indeed supports a very reasonable belief that we would occupy the subject as primary.

I want to make it clear that there are absolutely no other reasonable justifications to have denied our loan ; our credit scores and history are flawless and we make more than enough to support the mortgage. The FHA loan, to my understanding, is for situations exactly as this. It doesn't make sense to me that the finishes of the property preclude me from being able to purchase? Mind you, the inspections and appraisal proved that the property meets all required safety standards. By their  assessment, I should ONLY buy homes with luxury finishes? I'm baffled by this assessment and extremely disappointed that a property with this potential will go to someone else that can afford the 20 % down or better. 

I am aware I have no proof of discrimination ; but to be clear, my first name is XXXX and always gives pause when I am faced with baffling denials as I have worked extremely hard for my credit score and financial standing to take part in what should be a fair system. This reeks of a weak excuse to deny my otherwise very strong application.

I am more than willing to provide any other supporting documentation and correspondence for the above. Thank you.