Future Rental Income DTI Miscalculation

1 Reply | Philadelphia, Pennsylvania

Hi everyone,

Hubby is in the process of getting a conventional loan for a single family investment property. Put 25% down and tons of reserves (over 100k). He has also owned and managed multiple properties for several years. My issue is that he's getting burnt on my DTI because they are counting the full mortgage against the DTI, even though the property is going to rented immediately after it closes. So there is a negative -700 monthly mortgage of a place that will be rented that is being added to the debt. Yikes!

Correct me if I'm wrong here, but Fannie Mae B3-3.1-08 says that the lender needs to calculate the monthly income for qualifying purposes.  There is no lease.  Single Family Comparable Rent Schedule Form 1007, I believe?  

Isn't calculation Market Rent x .75 - PITIA = Projected Rental Income (which should add positively to the income) 

So I checked the appraisal and saw that they didn't do a Form 1007 or have anything listed regarding rental income.

What should he do here?  Request they send the appraiser back out?  

 

Unfortunately Covid has changed a lot of things. I just closed on a property that we were unable to use any of the rental income for qualification. I am in the process of working with another lender and it has not been an issue, which leads me to believe it depends on the lender being used. I would ask the lender if the 1007 wasn't ordered because they wont use the income or if it was missed.