I'm trying to qualify for a HELOC. The problem I'm running into is two-fold:
1) Many banks still have a moratorium on these due to COVID
2) Debt to Income qualification due to unique rental income situation
On #2, I bought a triplex last September, one unit was delivered
vacant, I spent a couple months renovating it, then filled it a couple
months ago. Both credit unions I've visited so far calculate rental
income for debt to income purposes using last years tax return.
Unfortunately, last year looks terrible due to the
purchase/vacancy/renovation. However, today's reality is much more
stable with it fully rented.
Does anyone have recommendations for a bank or credit union that
might calculate this differently? Perhaps using the income *.75 model
(where I would show a profit)?
I'm in Los Angeles, have plenty of equity in my personal home, and am looking to secure a small LOC of $50k-$100k.
Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
5y
@Tim Grich the issue you are running into is that you dont have the current rents reported on your Schedule E. Unfortunately I dont know any credit unions in LA that would base a new HELOC of stated rents as the HELOC market is very tight at the moment.