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 85% of rents for FHA financing.
If someone is buying a single family residence, lenders will want to see the rental agreement and proof checks are coming in (or if a security deposit has been received).
If someone is buying 2 to 4 units, lenders will use the market rents of the units even without rental agreements in many cases. Being able to use rents from other units makes qualifying to buy units much easier than many people realize.
Founder/Broker | JVM Lending
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