Hello BP community, we're interested in moving into a new home (fixer upper we can eventually rent as well) to free up our existing house that we have hacked to use as a SFR. We attempted to get a mortgage for a new home for $300k ($250k for the house, $50k for remodeling), which would be totally feasible with our income of $160k and current debts. However the bank we approached had no interest in counting the potential rental income for our existing property toward the DTI calculation when we applied and were rejected for the loan.
We currently operate a 12 unit property owned by our LLC and were thinking about asking the lender on our commercial property if they would finance purchasing our existing home so it would be owned by the LLC to remove it from our DTI calculation. This of course would increase the interest rate of the loan and reduce the term from about 28 years (we just refinanced) to 20 or 25 years, blowing a hole in our potential cash flow.
Hoping there are some alternative options to overcoming DTI and house hacking with multiple conventional loans.
Fannie Mae will allow you to use rental income on a departing residence. This must be an overlay of that bank. You would have to have a signed lease agreement and 75% of that rent would count.