Desolately Need Help; My income doesn’t count towards FHA loan
Hello all,
My girlfriend and I are trying to get a $250,000 FHA loan for a duplex to house hack. We didn't think it would be any issues at all because combined we make enough for that loan amount. After going through the process for pre approval today with a Mortgage banker for home loans they said since my income is a national fellowship stipend it cannot be counted AND my secondary source of income that I've had for 4 months also CANNOT be counted. This made only my girlfriend's income be eligible leaving us pre approved for $200,000, which is very disappointing and discouraging since there are very little duplexes in our area especially ones we'd want to live in for $200,00. This was a dream of ours for so long and any help or insight would be appreciated.
We both have over 750 credit score and 0 debt.
Thank you!
Quote from @Grace Maxwell:Grace, thank you for the suggestion! I do not have any debt so I’m unsure if taking my name off will help but I can definitely ask!
Quote from @David Lund:
Quote from @Joshua Jones:
Thank you @John Warren. @David Lund in terms of income whether it can be used or not, it depends. If a stipend is not likely to continue, maybe not. But if it is guaranteed, then possibly. With your part time income from 4 months ago that you started, how many hours are guaranteed? DSCR (debt service coverage ratio) loans might not work as i assume you are doing FHA for the low down payment. Feel free to private message me as well. When it comes to multi units, I handle close to a 100 a year for lending and know the rules and what we can and can not use. I am curious though how they came up with 200K? Did they take in the proposed rent for the potential duplex or not? Many lenders can not use that proposed rent if you do not have the history of receiving rent. However that is not the real guidelines. It's really looking at the whole situation. Don't be discouraged. Not all lenders are created equally. If they were, every lender and banker would do the same amount of business. I have 31 licenses and MO is for sure one of them. Feel free to reach out if you want me to look at it.
I have the stipend for 2 more years after this school year (it has to be renewed yearly but that's basically a sure thing). With second source of income it is salary based so I receive X amount guaranteed every month.
I'm not entirely sure how they got the $200,000. They did a 3.5% FHA loan and my gf and I both had high credit scores and no debt so that probably helped. They did not take in the proposed rent.
You should be getting some credit for the future rent of the other unit. Did you ask the lender if taking you off the loan entirely would help? If you have some student loan debt (likely, given your field- really impressive!) then having you on the loan means counting your liabilities without having income to offset them, so your girlfriend may qualify for more on her own than both of you together.
Quote from @Walter Correia:
@David Lund
You can look into consumer non-DSCR loan based on your income. Feel free to contact me, perhaps I can help.
Thank you for the suggestion, Walter!
@David Lund- you are welcome - fyi - within the conventional loan idea - there are 2 angles that can be used ..one is called the FANNIE MAE ( fnma ) and the other is callled the FEDDIE MAC ( FHLMC ) approach .....they can vary slightly so make sure to ask the lender to check out both avenues - good luck
Quote from @Dave Skow:
@David Lund- you are welcome - fyi - within the conventional loan idea - there are 2 angles that can be used ..one is called the FANNIE MAE ( fnma ) and the other is callled the FEDDIE MAC ( FHLMC ) approach .....they can vary slightly so make sure to ask the lender to check out both avenues - good luck
Great advice!
Quote from @David Lund:
Quote from @Scott Mac:My fellowship is 4 years and I’m currently on year 2. My dissertation is over lunar plasma surface charging for future Artemis missions!
Hi David,
Ouch, that makes sense though, it's like hitting the lotto.
National fellowship stipends are only a one year job (maybe 2) am I right?
A 30 year Government backed loan on a 1 year job seems like a shaky loan to me.
So what is your dissertation for this stipend--or is it just teaching?
Or are you inventing Flubber? https://www.youtube.com/watch?v=JL1HSJLvqVs
Good Luck!
There is an "all other income" bucket in Agency loans. If something falls into it, they will only "count" it if you can document that there's three years left. That's why single parents getting child support often can't "count" that child support, for mortgage purposes, after the kid's 15th birthday....
Quote from @Chris Mason:Very good insight!
Quote from @David Lund:
Quote from @Scott Mac:My fellowship is 4 years and I’m currently on year 2. My dissertation is over lunar plasma surface charging for future Artemis missions!
Hi David,
Ouch, that makes sense though, it's like hitting the lotto.
National fellowship stipends are only a one year job (maybe 2) am I right?
A 30 year Government backed loan on a 1 year job seems like a shaky loan to me.
So what is your dissertation for this stipend--or is it just teaching?
Or are you inventing Flubber? https://www.youtube.com/watch?v=JL1HSJLvqVs
Good Luck!
There is an "all other income" bucket in Agency loans. If something falls into it, they will only "count" it if you can document that there's three years left. That's why single parents getting child support often can't "count" that child support, for mortgage purposes, after the kid's 15th birthday....
I would have your gf apply on her own and will most likely get approved for a higher mortgage.
I used Wells Fargo as my lender and they offered me a conventional mortgage with 3.5% down. If they do it, other lenders must as well. Worth looking into.
Hi David,
In case it can help w/ your plans, you might consider unsecured funding. Funds can be used for down payment or gap funding, as well as 100% funding of a purchase.
Be happy to connect.
Best,
Dave
Quote from @David Lund:Hi David,
Hello all,
My girlfriend and I are trying to get a $250,000 FHA loan for a duplex to house hack. We didn't think it would be any issues at all because combined we make enough for that loan amount. After going through the process for pre approval today with a Mortgage banker for home loans they said since my income is a national fellowship stipend it cannot be counted AND my secondary source of income that I've had for 4 months also CANNOT be counted. This made only my girlfriend's income be eligible leaving us pre approved for $200,000, which is very disappointing and discouraging since there are very little duplexes in our area especially ones we'd want to live in for $200,00. This was a dream of ours for so long and any help or insight would be appreciated.
We both have over 750 credit score and 0 debt.
Thank you!
Ask the seller if they will do a 20% carry back for the $50 000. It is not uncommon and you can work out the details on that which will work for both parties.
Don't ever give up on your dream 🙏