Using Potential Rental Income as Income for Mortgage (VA loan)

6 Replies

I have a unique situation. 

I am trying to buy a 2-4 unit property in San Diego, California using my VA loan. I currently only have disability income and a small inconsistent income from my online selling business.

I've heard that if you plan to occupy one of the units, it would be possible to use the potential rental income of the remaining units as income to qualify for the initial mortgage. 

If anyone has any information please help.

Have you been a landlord before?

I own a duplex in Golden Hill in San Diego.. (My first time as a landlord... or homeowner)

I've had it for two years now, and am now looking to buy another small multi.

When I contacted my bank, I was told that it was a good thing that I had two years of landlord experience under my belt, because that it's what they require to count the rental income.

When I bought my unit, I made sure that I would be able to cover the entire mortgage, even with 100% vacancy.  I highly recommend this more conservative approach for first-time landlords.

Knock on wood, but my place has been doing great, but it has been nice knowing that the worst case scenario is still manageable.  ;-)

And thank you for posting a topic that I could speak to!

This was actually my first post on BP.

I was determined to have my first post be something that might add value to someone, so I can pay it forward.

:-D

Recommend checking with a few banks/brokers. My first bank (large national bank) required the 2 years experience. I then called a mortgage broker and he let me use 75% of expected rent in the purchase.

Awesome information everyone I was so confused about the landlord requirements and all. I think I am going to go the FHA route on the Multi Family and save my VA loan for our personal home purchase next year. I believe FHA allows for rental income to be used but at the cost of 3.5% down payment.