Have $30k for down payment, want to buy a home, no w2! Help!

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Hi my fiancé and I have about $30k for a down payment on a home. We’re looking to buy a multi family home in Long Beach, CA so we can house hack and live in one unit and rent out the others. The problem is we don’t have reportable income! My fiancé gets paid all cash and I am a landlord for my current home, profiting about $2k a month. However the current house loan is under my grandfathers name and he reports it on his taxes. Is there any way for us to get approved for a loan? FHA or conventional?

@Mealyann Saing your income should be reported no? Or are you just getting paid cash too?

Anything paid in cash most conventional
Lenders won’t touch. So unless I’m missing something I’m pretty sure you can’t get conventional financing. Not having a W2 is fine but then they look at tax returns and since it’s not on there they can’t use it.

Best option would be to report it and *gasp* pay taxes. Conventional loans are government backed. Can’t get those if you don’t pay taxes.

There are likely other loan options but the rates will be higher

As far as I have dealt with lenders they have wanted 2 years of tax returns and bank statements as proof of income for self employed. They also go off the bottom line number, not your gross. There might be other options out there, but I haven't pursued them

You would need two years income for yours to be considered. Your fiancée would benefit from looking at getting a w2 job because off the books income is not going to count.

Also your current financial situation seems dangerous to me because of the loan of your house being in your grandfather’s name. When he dies other family members would likely have rights to the house and they may not want to continue with your arrangement. And you would not be able to qualify for a loan to take it over in your current financial situation.

Imo you and your fiancé need to work on making yourselves financially ready for a loan.

For FHA or conventional they will require 2 years of income history ... unless say you where in school the previous year and then started a business they would probably accept only one year. other options might present themselves if the property has 5 or more units, and you can look at commercial options. (I know almost nothing about commercial.).

That aside from the information you have shared so far.. I think you will probably have to wait until the end of this year and report at least as much or more income on your next tax return.  You can add back in depreciation and losses for say theft.. but not most of the other self employed deductions..  Your debt to income will be calculated using the avg of the two most recent years profits so long as the second year shows you made equal or greater profits vs the first year.. should be able to find that amount on line 51 of your return.    

Good luck with all of it... I would certainly reach out to an Mortgage broker in your area, if you can find a good one they will pull your credit and help you form a plan as to what you will need to be able to qualify.. ie next year you need to net 102k to qualify for x amount and a score of y so you can buy this property.

@Mealyann Saing you are in no position to purchase real estate. Anyone that says that they will loan you money for this purchase is trying to rip you off. You will need two years of tax returns, but even if you reported your income, $2,000 per month is not enough. You will also need a credit score of 620 or more. Lastly, I would wait until you are married before buying a house with your fiancé. Otherwise, you are both entering into a general partnership, which is the same as you and I buying a house together. Very little legal protection for either of you in the event that one of you skips town. I know this is not what you want to hear, but it is the same thing that I would tell my own son.

I was approved for 150k using under-the-table income.I had nothing reported at all, so My lender reached out to my employer and my employer just filled out a form stating what I make.