Most people are aware that sellers can use rental income from their departing residence if there is a sufficient equity cushion (conventional – 30%; FHA – 25%).
Investors, with tight debt ratios, can also usually use the rent from the house they are buying to qualify. Investors need only to prove they have a potential renter in place by providing a lease, a copy of a check from the renter and a deposit slip to prove the renter’s check was deposited.
Owner occupants buying 2, 3 or 4 unit properties can also use the rents from the units they do not occupy to help qualify.
The only caveat to all this is that buyers cannot use “above market” rents to qualify; lenders require formal “rent surveys” from appraisers to establish market rents.
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