Rental income from a rented room in primary sfr to qualify?

Question

If I rent out a single room in my primary home can I use that rental income towards my 2 years of landlording experience and use the rental income to help qualify for a mortgage on another house? I am interested in house hacking and buying a new owner occupied place every year or two. It seems as though if I buy a sfr I would have rent it out for two years without living there before I can get another house unless I can qualify for a second mortgage. Am I correct?

Stephanie Medellin · Answer

@Joe P. You're not going to be able to use income from a rented room (aka "boarder income") in your single family home to help qualify with most loans. As far as I know the only exception is the HomeReady loan. If you can document a 12 month history of living with the same roommate (and receiving rent from that roommate) that will live in your new home, boarder income may be allowed under this program.

https://www.fanniemae.com/content/fact_sheet/homer...

One other issue if you plan to buy a 2-4 unit after living in an SFR is proving that you truly are going to move into a duplex or triplex. Single family homes are typically more desirable, so it's harder to prove that you'd want to move from a home to an apartment and qualify for owner occupied rates / terms.

Chris Mason · Answer

No, but excluding VA loans there is no such "2 years of landlording experience" requirement, barring overlays. Find a new lender.

Joe P. · Answer

Thanks @Stephanie Irto! Seems like I'll be much better off starting out with a multifamily so I can definitely use the rental income to qualify for another mortgage.

Joe P. · Answer

Thanks @Chris Mason I would like to buy a multifamily to house hack then buy a new one every year or two to build a rental portfolio. Problem is there aren't many multifamily properties available in my area so I'm looking into doing the same thing but starting out with a sfr. My only worry is qualifying for the second mortgage. My income is on the lower end but credit score and savings are in my favor. Do you foresee any problems qualifying for a second mortgage if I start out with a sfr as opposed to a multi?

Rental income from a rented room in primary sfr to qualify?

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