BiggerPockets

Hi All,
need a little advice. My wife and I purchased our home in california last year with an fha loan. My wife was offered a new job in las vegas and she took it. We rented a house and I am still commuting at my job in California. I do have the ability to transfer when the time is right. So, once she took the new position we sold our home using a land contract, which im carrying for 5 years.

Now we are looking for a new home in Vegas. I have talked to maybe 20 loan officers, every single one saying something different.

I can do 10% down if needed to, maybe even 20%. I would prefer to get an FHA loan though. Now all the loan officers ive talked to are trying to treat the sale of the property as a rental property. With that being said, you need to have 25% equity or 2 years on taxes to use the rental income, which there is neither. So the problem is that without the "rental" income were at like 56% DTI. So ive been told regardless if i put 3-20% im still over my DTI

is this correct? Any other ways?

thanks

Your problem is that selling via a land contract leaves you still liable for and primary party of the loan you took out to purchase the property.

So in a very real way this is close to you having a renter for a property you own, except that you do not get the benefit of any appreciation, but you are stuck with the risk of default.

As long as you are party to the loan and the loan exists (not paid off) this qualifiying problem will haunt you.

You need to consider purchase without a qualifying loan. Doing a land contract for a home in Vegas on which you will be on the buy side instead of the sell side is one alternative (albiet with it's own risks). Finding a house owned free and clear and buying with owner financing is another. If a family member is flush (or has good credit) they can buy the house and lease it to you with an option to purchase. Of course with all the houses out there you can just rent until the two tax return period is up and you qualify for a mortgage.

Good luck!

well i can try to find some homes that are f&c and try that route. But Im looking at a specific home, not just any house i can get my hands on.

As far as rental income, its not going to show up on my taxes. he takes the write off. So, there will never be two years of it on my returns as a rental property. And He pays via a loan servicing company.

Well he has only made two payments. Im trying to get approved now, not in 2 years.