Hi Underwriting experts,
Here is the situation I am in,
I got in contract for 2 properties yesterday. The plan was to go with only 1, but they both are attractive. They both will be investment properties and I will have rental leases for them setup before the close.
To pass the D/I threshold, the underwriters need to consider rental leases from these properties. I know the underwriters can consider future income as long as the lease is in place. But what happens when you have 2 properties going through the underwriting at the same time.
1) Will they give clearance on both the properties together and consider the future income or
2) The will look at properties individually. What that means is that they look at property A, consider its (future) rental income and don't consider income for B, since it is a future. Essentially consider debt from both but lease income from one.
Let me know if anyone has any experience with this situation.
@ Rian Ash
Curious with all the responses as I'm in the same situation.
@Rian Ash you can assume the option of whichever poses less risk to the lender. Option 2 would be the least risky to the lender, considering they're underwriting only the subject property for two separate loans (and two closings). You could not close on the other property for any reason, so as such, really can't be used to qualify you for another subject property. if subject property 2 fell out of closing, property number 1 would follow suit. This really doesn't make sense.
Each must qualify on their own, assuming you're not doing a blanket loan. Then a commercial blanket loan would look at both properties, proportionally, because you are closing and taking title to both of them at the same time. In a conventional scenario, this is not what happens. You take title to the properties at two separate closings. Your closing could be weeks apart for each property, or they may not happen at all.
Hope this helps
@Eric Johnson Thankyou! What you suggested makes sense and per my calculations, I should qualify this way too! I will check with my lenders