I have been struggling through the process of getting qualified for the past 4 months. It has been a long, hard, and incredibly brutal process. A little back story first, about a year ago, my Dad and I decided that we wanted to start our real estate journey together, and purchase our first house hack using an FHA loan. The house is going to go under my name, and he is going to be the co-signer. Since I am the owner of a recently started marketing agency and don't have a stable on-paper W2 income, we are using my Dad's income to qualify as a non-occupant homeowner.

Our budget for the home is $250,000, and we are looking in both the Clemson and Greenville South Carolina areas. We have already been in touch with numerous real estate agents and are going to be able to find a house within this price range. This is an investment for both of us, and I am only planning on living here for one year - so we aren't going to be picky when it comes to finding the property.

We both have enough money to pay for the down-payment and 3 months' cash reserves, so this is not an issue. Here's where it gets tricky, and why I am asking all of you for help. My dad is a self-employed owner of a plumbing company that has been around for 12 years, he is a 50% owner with his partner being the other, and they are an LLC that is registered as an S-Corp.

I have been working with a lender for the past 2 months, and between a lot of back and forths, we were finally able to figure out how to work in enough deductions back into his income in order to get his income underneath the required 50% DTI in order to qualify. Credit score also isn't an issue here.

Here is what is an issue. My lender just told me today that due to the fact that my father's business technically declared a slight loss in both 2019 and 2020, that he is unable to use any of the W2's from his business to qualify us for the pre-approval. As you can imagine, this is completely devastating, and something - if true - I wish I had known about earlier. If this is the case, then this means that we won't be able to qualify at all, even though the business only declared a 1,300 loss and is generating 100,000s of thousands of revenue per year.

After working through so many setbacks, talking to numerous different lenders, I don't know where else to turn for answers other than this wonderful community of experts. My ask is that if any lenders or self-employed homebuyers have any advice, potential workaround, or other loan options, then it would be incredibly appreciated. My lender also told me that due to this loss that his business declared, we wouldn't be able to qualify for any conventional loan either (97 - 3% down loan included).

The two options that he provided me with were either getting the business taxes amended to not declare a loss, or to utilize as bank statement loan that would require 20% down, which is unrealistic for both of us financially. I am hoping that there are others he hadn't thought about.

It's hard for me to fathom that this minor of a factor could be the thing that stops us from pursuing our real estate investment dream together, and although I am feeling down and close to giving up after today's news, I know that I can't.

If anyone who reads this has any suggestions, methods, or knowledge that is unknown to both me and my lender then I would GREATLY appreciate it.

Thank you very much, I am looking forward to any potential responses and at this point am open to anything.

(Also, I posted this on the Getting Started forum as well so that this can get as many eyes as possible and hopefully a solution. We are so close. Thanks again.)

- Dakota

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