How Does a Bank Verify "Landlord Experience"?

Question

Hi BP!

I would like to get financing for a small multi-unit property. I have read that, in order for the bank to utilize any of the rental income from the property, I would have to have "landlord experience". I am wondering if this is proven through me actually owning investment properties and being a landlord? Or if other landlord experience would count. I was the resident manager of a 30 unit building for a few years back in 2009-2011.

Any insight you have will be greatly appreciated! Thank you!

Todd Summers · Answer

Hi Melissa. From all the research I have done personally looking into this subject I have found a few different answers to that question. First off it depends on the size of the mutli-family property 2-4 units I understand can still qualify for an fha loan as long as you are living in one of the properties and renting out the others if this is the case I have found that they will count a percentage of rent collected towards income. I have also heard that once your rental income shows up on your taxes then you can start to use it as rental income, and the last one I was told my banker at a local small town bank that once you have had 2 years continuous rental income and can verify it then they will count it as rental income and it will cancel out the debt side of that rental on your debt to income ratio. I hope this helps.

Brie Schmidt · Answer

They look for it on your taxes, your previous 2 years of Schedule E.

Only one of them (Fannie/Freddie) requires 2 years of "landlord experience" for the loan.  I always forget which one though.  Find a good mortgage broker and they should be able to get you into the right loan program