Qualifying for a Primary Home Loan

5 Replies

My husband and I have been trying to qualify to purchase a primary home in So Cal (Jumbo Loan). We are also passive investors in several apartment syndications. All of our sponsors performed cost segregation studies in 2019, therefore creating a "paper loss" reflected on our K1's. Because of this, banks see this as a negative and are counting it against our DTI ratio. I have explained that this is simply a paper loss and not a loss of equity or underperformance from the property itself. Our CPA even wrote an explanation of this to which the bank's underwriters still counted against us. We are looking for a bank/lender who understands this scenario and can assist us. Any recommendations? Thank you!


I run across this every day with self-employed borrowers looking to purchase a home. The one thing that would help move you away from that issue is to use a Bank Statement program. You can use 12/24 months or either personal or business bank statements to qualify for up to 80% LTV.

@Cynthia Ortiz

Normally your investment in a syndication does not impact your tax return so it would be interesting to see how it was reported on your tax return and why the underwriters are having an issue with it.

Passive losses from syndications normally can only be offset with other passive income or when you exit the syndication.
They normally show up on schedule E but won't flow to the front of the return.

@Cynthia Ortiz I recommend you connect with @Jason Wray from the Federal Savings Bank. You'll find him here on BP. I don't know for sure that he has a product that will work for you, but he definitely understands working with investors. We're working with him now and couldn't be happier!