Real Estate Investor · Bridgewater, NJ · Member since 2014 · 6 posts · 1 vote
Hi friends! I purchased my first multi family using FHA in June 2016. For various reasons, I actually regret using CHA. Anyway, I am looking to acquire more and have run into a problem- I don't have 30% equity and cannot provide 2 years of tax returns showing my rental income. Without being able to use rental income for another loan, it appears that I have a ~50% debt-to-income ratio! (I was able to buy because the lender considered 75% of the existing rental income). For now, my mindset is if i want to get anything in the next 2 years, it will have to be an all cash purchase (assuming I buy alone rather than team up with someone). I'm wondering if anyone else has been in this situation and what your gameplan was or whether anyone has some creative financing ideas? I do not want to owner occupy again/ lease to own. Any tips are appreciated!
What you are running into is an internal bank overlay. What you want is a mortgage banker that can use your rental income based on lease.
@Sylvia Kuzminski I hope you are looking to buy the next as an investment with 20%-25% down. Given that you just bough an owner occupy property, you will have a very tough time getting underwriter to approval another owner occupied loan in such a short time.
Rental Property Investor · Philadelphia, PA · Member since 2014 · 32 posts · 20 votes
9y
I would talk to brokers instead of bankers. Some might have the connections you need.
I am in a similar spot as you with FHA. I got all excited about my first purchase, I sort of neglected how I'd be able to buy my next property afterwards.
I should mention that on my most recent purchase, I had the two years of tax returns, so they did count 75% of my rental income. The problem though is that I have now reached the next limit.