Posts

“Departing Residence” Rental Income – More Important Than Ever!

“Housing Crash In Austin!” Somebody posted that on Twitter last week, citing climbing inventory, price reductions, and fewer buyers. That same day, however, Heejin and I had dinner with a very successful agent in Austin, and I asked him about the tweet.  This was his response:  “What, seriously?  Nobody told me.  All of my investor-clients […]Read More

No Income Verification Loans: DSCR

I’ve mentioned this “horror story” a few times in my blogs. In 2005, I was at a Christmas party where a wholesale rep from SunTrust Bank was bragging about his “no down payment” (100% LTV) “NINA” Loans for investors. NINA stood for “No Income/No Asset” verification. Borrowers only needed a 680-credit-score and they could buy […]Read More

Rent Payments & Rental Income To Qualify

Here is some important info about using rental payment history and rental income to qualify. GREAT NEWS: “DU” USES RENT PAYMENTS NOW On the good news front, Fannie Mae announced last month that its automated underwriting system (DU) will now take into account rental-payment-histories, to make it easier for renters to become homeowners. Here is […]Read More

Using Departing Residence Rents; Equity Cushion; Appraisal Issue

Many homebuyers want to buy a new home before selling their existing residence. And, in most cases those buyers need the rental income from their current residence to qualify for their new purchase. Lenders no longer require “equity” in the departing residence before rental income can be used to qualify. And lenders will only use […]Read More

Using Rental Income From Departing Residence: Lease, Check, Deposit

We are seeing a lot of borrowers lately who want to buy a new home before they sell their current home. These borrowers, however, often cannot qualify for a new home b/c of the debt against their current home, and they need to use the potential rental income from their current home to qualify. Borrowers […]Read More

Using “Future Rents” to Qualify

This is a reminder that “Future Rents” can be used for income to help qualify for purchases. The “Rent” must be market rent, however; it cannot be over-inflated to augment income. Lenders order “rent surveys” from appraisers to verify market rents. Lenders will only use 75% of market rents for income for conventional financing, or […]Read More

Debt Ratios Too High? Buy House As Investment; Not As Occupant

We have borrowers with substantial down payment funds and limited income who cannot qualify for the home they would like to purchase b/c their debt ratios are too high. A solution for these borrowers is to buy the house as an investment property (instead of an owner-occupied property). Buyers can put a renter in the […]Read More

Rental Income = 75% of Gross Rent (Again)

For years, Fannie Mae and most lenders allowed borrowers to use 75% of the actual rent on a lease agreement for “qualifying income” (as long as the rent did not significantly exceed market rates). After the 2008 meltdown, Fannie tightened up and correlated only to the income reported on a Schedule E on a tax […]Read More

Using Rental Income to Help Qualify for Purchase; Market Rent

Buyers can use future rents to help qualify for purchases whether they are buying single family or two, three or four unit properties. * Borrowers can use the market rents, and not actual rents, for income in most cases. * Borrowers buying a 2 to 4 unit property as owner-occupants can use the market rents […]Read More