Eugene, OR · Member since 2016 · 7 posts · 2 votes
So I am under contract buying a new primary residence , and I have a couple rental properties. At one of my properties (a duplex) the tenant didn’t pay January , February, and probably won’t pay March. I live in Oregon so the law right now is if they applied for assistance you can’t evict for non payment of rent. She did apply for assistance.. no word yet if it was approved or not. Anyways, I didn’t even notice until recently she wasn’t paying and my dream home came available and I got a pre approval and it’s under contract. Now that I realized she hadn’t paid in a couple months , will the lending fall through ? The income from that rental was factored into me qualifying for the new home.
So I am under contract buying a new primary residence , and I have a couple rental properties. At one of my properties (a duplex) the tenant didn’t pay January , February, and probably won’t pay March. I live in Oregon so the law right now is if they applied for assistance you can’t evict for non payment of rent. She did apply for assistance.. no word yet if it was approved or not. Anyways, I didn’t even notice until recently she wasn’t paying and my dream home came available and I got a pre approval and it’s under contract. Now that I realized she hadn’t paid in a couple months , will the lending fall through ? The income from that rental was factored into me qualifying for the new home.
You need to ask your lender- keep it hypothetical at first. Typically lenders want a copy of your lease and recent bank account statements- underwriters may or may not try to match up deposits with your leases.
That said- here in Idaho we have applied for assistance on behalf of our tenants on more than one occasion and the process has been really swift and simple. You might reach out to whoever is distributing those funds locally and ask about your tenant's application. I don't see why they wouldn't share details and the timeline with you.
Real Estate Agent · Portland, CT · Member since 2019 · 761 posts · 849 votes
4y
Hey Becky,
It may or may not depending on the lender's decision and requirements. If your DTI could support the cost of the full mortgage while the tenant is still there, that may be an argument for the lender. The bigger question is are you ok with this and can you afford to take this on while either getting the tenant evicted or getting them up to date on rent?
Talk to her and find out when she should be getting the payment. I don't understand how the government can expect landlords to keep footing the bill for months while they process the paperwork and tenants don't pay the rent.
As for the bank, simply tell them she's still under contract with the lease. If they ask for more info tell them as per OR law you can't evict her as she's applied assistance back in Jan and you've been told it is a X week wait. Also call the govt and see if you can get more info.
So I am under contract buying a new primary residence , and I have a couple rental properties. At one of my properties (a duplex) the tenant didn’t pay January , February, and probably won’t pay March. I live in Oregon so the law right now is if they applied for assistance you can’t evict for non payment of rent. She did apply for assistance.. no word yet if it was approved or not. Anyways, I didn’t even notice until recently she wasn’t paying and my dream home came available and I got a pre approval and it’s under contract. Now that I realized she hadn’t paid in a couple months , will the lending fall through ? The income from that rental was factored into me qualifying for the new home.
You need to ask your lender- keep it hypothetical at first. Typically lenders want a copy of your lease and recent bank account statements- underwriters may or may not try to match up deposits with your leases.
That said- here in Idaho we have applied for assistance on behalf of our tenants on more than one occasion and the process has been really swift and simple. You might reach out to whoever is distributing those funds locally and ask about your tenant's application. I don't see why they wouldn't share details and the timeline with you.
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
4y
@Becky Smith How thin are your margins and reserves if a primary residence is dependent upon 2 months of rent??? Seems like you might be overextending yourself here.
BUT, if this is truly your dream home there has to be a way to get it done. I would suggest reaching out to other lenders just in case this lender doesn't approve you. Other lenders may have slightly more relaxed requirements. They should be able to rely on 2021 income.
Can you get a loan from someone to pay more down? A lower LTV should also relax the lender's requirements.
Hi, In my experience, Lenders typically only ask for the lease agreement. As long as you can provide this, then what's actually going on with your tenant is between you and that person. I'd just make certain that I can afford the upcoming mortgage without the income from that property.
Investor · Idaho Falls, ID · Member since 2016 · 912 posts · 629 votes
4y
As mentioned above, they want to see the lease agreement and the previous tax returns. Your previous year of tax statements will show the income the property created. Since you are referring to Jan-March of this year, they probably won't even say anything.
Eugene, OR · Member since 2016 · 7 posts · 2 votes
4y
@Don Spafford this is what I am hoping for because there is no gaps in payments or tenants for the last 2 years besides the recent months for that 1 tenant . And I did just learn that the full amount is coming in soon from assistance , but could take up to 60 days to receive/