New construction NINA and “projected-income” financing help
Hi everyone. Posted once before and have since visited an investment meetup and have structured my plan a bit better but need further help still.
I own my own business as an architectural designer and have designed and built houses with various GCs over the years. I am not a GC myself but with my experience I will be doing a lot of the work on this project myself which will keep costs low.
My credit score is 832 and I have no debt. I own the land outright (valued at $100-$150k) and the projected value of the house after being built is expected to be upwards of $800k. I have decided to use this property as a rental income, as it seems like a good exit strategy if I can use the rentals projected income to qualify. The rentals in the area are set around $6-$12k/month depending.
Here’s my issue: I was told previously by a loan officer that in order to secure funds for this project, I needed to sell my existing home. So I did. That turned out to be severely misguided advice as I was then told that because I sold the property, which was an income property and made up half of my income, I no longer qualified for the loan! They told me,” we can’t use your previously noted income because the rental property no longer exists therefore the income doesn’t exist.” I don’t want to make anymore mistakes like this and believe this means that I now need a no doc approach.
I found information on lendingtree as follows:
“NO INCOME, NO ASSET
Available only for investment properties, current no-income, no-asset (NINA) loans are approved based on projected rental income for the property being purchased. Typically, as long as the rent covers the new mortgage payment, no income or asset documentation is necessary.
Who they’re best for:
Real estate investors with enough cash for high down payments may be able to quickly build a portfolio of investment properties with this type of loan”
This sounds like what I’m looking for but I’m wondering what the caveat here is? I don’t want to rely on calling another lender who may lead me down the wrong path again, so I wanted to ask an audience of people for their thoughts.
If this isn’t viable please do let me know, along with any ideas you might have, and I’ll get back to the drawing board and visit some more meetup groups to continue learning about the financial aspects of this journey.
Not willing to give up on this project yet. Thank you for your time!