FHA 4plex advice. Can't get approved?

Question

Hi, I need help getting pre-approved for an FHA loan for a 4plex in NY. Asking price is $299,000. I have 740 credit score, 0 debt, but don't make enough ($35K a year shown on taxes). I have a side business I made an extra $20K this year but it won't be claimed until I do my taxes this year. I have just over $25K saved up, $30K 401K, and a little bit of money in stocks.

I talked to a mortgage lender and he recommended getting a cosigner to help with the low income, but since the co-signer won't be occupying the property, minimum down payment is now 25% with FHA or 20% with conventional.. it actually made it worse for me.

Is there any way I can get approved for this??

Alex Kouvatsos · Answer

Hi Chris, thanks for the reply. I'm not trying to be dishonest, I plan on showing all my income I made this year, but I'd like to buy a property as soon as possible, and based on my last year's taxes (before I started my business), it shows that I do not make enough to qualify unfortunately. Is there any lender that will consider giving an FHA for a 4plex to someone who has a lower income with no debt?

Chris Mason · Answer

Time to start getting honest with the IRS. Your intent to disclose the side business income to the IRS and pay taxes on it is on the right path.

If you want a federally subsidized mortgage, which FHA loans are, you've got to do your part and honestly pay your fair share into the federal system.