House hacking loan question
3 Replies
David Morse
posted 12 months ago
How do you prove potential future rental income to a lender? Or can you not factor that additional income in? Seeking an FHA loan. First time home buyer looking to house hack a triplex or quadplex. Living in one unit renting the others. Thanks in advance for any helpful advice!
John Warren
Real Estate Agent from Riverside, IL
replied 12 months ago
@David Morse the appraisal more or less takes care of proving the income of the building. The lender can then use 75% of the current rents or 75% of the pro forma rents to help you qualify from the income side. This is just one of the many reasons that I love the house hacking strategy! It really makes buying a small multifamily property one of the more affordable things you can do to get started.
Cameron Tope
Property Manager from Katy, TX
replied 12 months ago
@David Morse My experience has been the same as what @John Warren stated - the lender will use 75% of rents towards your DTI.
House hacking is a very lucrative strategy!
Craig Curelop
Real Estate Agent from Denver, CO
replied 12 months ago
@David Morse - Confirmed with the comments above. The appraiser will take 75% of market rents. Sometimes, if you can get a signed lease before closing, they can use that too. However, that differs by lender.