Primary Residence Mortgage without 2 years rental history?

[James Masotti]

Something I knew but nonetheless seemed to have buried deep in the recesses of my mind...but I called a bank today about getting pre-qualified on a mortgage for a new primary residence. I have two properties I purchased last year in an LLC that were rented out in the past two months for the first time. Add to that I plan to rent my current primary residence...and basically I was told there no chance of getting pre-approved. Now I realize this is just one bank and I have every intention of calling around, but I figured that I would throw the question out there to the BP community because I can't imagine I'm the only one that's had this come up in the past. How have other folks handled this? Any regional (South Jersey) or national lenders that are more flexible to investors on their individual mortgages?

I haven't had an issue getting my commercial mortgages approved...but I know that most residential loans are Fannie/Freddie friendly and adhere to totally different guidelines. 

Anyway...I appreciate any thoughts and perspectives anyone's able to provide!

[Chris Mason]

Hi @James Masotti,

If I've said it once, I've said it a thousand times on BP. :)

Rent from rental units can be counted in the mortgage math before it appears on tax returns, overlays aside. By all means, call around. If you've been buying good properties, you should actually have an easier time making the DTI numbers work, if the math is done correctly.

And you don't need to take my word on it, here it is from fanniemae.com direct. Note that I don't suggest you make it your job to educate any particular mortgage professional, I just want you to know it's real so that you can go find someone who knows how to do it without screwing up your transaction (the right person will start describing things to you that remind you of what you read at that link above & then you will know you've found the right person). Maybe that someone is here on BP, maybe you bump into them at your local REIA, maybe you just need to call your agent and ask them who is REI-friendly, who knows.