Full time student. How to qualify for a loan?

Question

I’m a second year student at my university with one year of w-2 work experience. I have 15k saved up to put towards my first house hack. I want to get the deal done as soon as possible so that I can be househacking in the city of my university for the last two years of my schooling. Is there any way I could qualify for a descent loan? All of my cash has been saved up from side jobs and I pay my tuition in full every semester. I have no debt but about a year of using a credit card to somewhat build credit. The city of my university is Lafayette, La

Bruce P. Bellott · Answer

@Jabbar Adesada

Thanks Jabber! I’m definitely going to check this out it seems like an ideal option for someone in my shoes.

Jabbar Adesada · Answer

@Bruce P. Bellott

Hey Bruce I was in a situation similar to yours a couple months ago I had no credit, and less than 2 years of W-2s. You can get a non occupant co-borrower which is similar to a co-signer, but they are on title and the note. This allows you to stand strong on a family member’s or close friends strong credit, good income, and low DTI. First find a loan officer that will allow you to use one in your current financial position and ask them what your co-borrower needs to bring to the table so you can qualify, then you’ll need to find someone who trusts you and that you trust to co-borrow on the loan with you. Offer maybe some profit share or cold call some friends and family. They will have ownership interest, the property will show up on their credit report, if you get foreclosed on that will kill their credit so ensure you have the knowledge and reserves in place to execute a successful househack if you go this route. Also if you go FHA you can possibly refinance them out of it after 6 month with the FHA streamline refinance eliminating their risk out of the deal if done right. The FHA streamline refinance is suppose to require less documentation and verification than a normal loan. I’d talk to a loan officer as I am not one, but this was a solution I went over with mine that night work for you. Always ask how can I!!

Bruce P. Bellott · Answer

That makes total sense. It’s sounds like I’ll need to get a job soon. My last job was at a small restaurant and I don’t plan on going back. I plan on getting a w2 job in the near future but I’ve heard that I’d need two years under my belt before it could help me. I’ve also considered having someone co-sign. Do you think that’s a potential option? Thanks and you bet I will keep my head down!

Suzette T. · Answer

Hey Bruce!

Just sent you a private message. We were in your shoes once and found creative solutions!

Kevin Romines · Answer

Unfortunately with it being owner occupied, you are subject to the ability to repay rules. Those rules say that you must show the ability to repay with some form of ongoing stable income. Stable meaning at least 1 year in a field and that there is a high likelihood that the income will continue for 3 years into the future.

Now if you went back to work in the field that you already have 1 year experience in, then with 30 days worth of paystubs, you should be able to close on the loan so long as your debt ratio was at about 50% or less. You wont be able to count boarder income (renting out rooms) unless you can show that income on the last 2 tax returns.

The 1st one is always the toughest. Keep grinding, you will get there.