Conventional loan with seller financed properties

[David Rutledge]

Good afternoon,

I am a relatively new investor with a total of 5 properties. Last summer I purchased two seller financed properties in addition to the 3 properties I own with conventional financing.

I currently do not own a primary residence. I recently got engaged to my girlfriend and we are planning to buy our own home in the nest year or so. I know how detailed and prepared you need to be in order to qualify for a loan so I am proactively trying to get my ducks in a row before the time comes to apply for a loan.

I have a question specifically related to how a lender would view seller financed homes. I believe I am on title with the seller for both properties. I have lease agreements for all the properties and they are all cash flow positive but I am worried that a lender would not look favorably on the complex situation with my seller financed homes as they are not outright mine on the deed etc.... Has anyone had any experience with this or have any information or advice they can share?

I really do not want to sell these properties but I will if I am unable to obtain a conventional loan with them in my portfolio.

Thanks so much in advance.

David

[Roy N.]

@David Rutledge

If the vendor financing is registered as a mortgage on title, then it will be seen and counted by a conventional lender.  However, if the vendor is still personally on title as a tenant-in-common, there may not be a mortgage registered ... in which case, a conventional lender may not see the property at all ... or will simply see a property you own jointly with a another party.

That said, you will still be signing an agreement with the conventional lender in which you state that you have disclosed all such debt obligations :-)