Financing the Tenant Buyer in the Dodd Frank Environment

2 Replies

This is my 1000 th post! Wow!

I wanted to post this link

http://www.foxbusiness.com/personal-finance/2014/02/06/fha-loans-still-offer-advantages-in-2014/

FHA is the lowest barrier to entry for home ownership, and it is important if you are advising FHA possible borrowers you need to know your stuff.

I would advise you all to give the TBers a 1003 app and send them to a RMLO for mortgage counselling.

But you need to know the basics of financing FHA and non FHA.

ATR is important. See http://www.consumerfinance.gov/regulations/ability-to-repay-and-qualified-mortgage-standards-under-the-truth-in-lending-act-regulation-z/

Even if you are just renting with a pure option, send them to the RMLO for a written opinion.

Have the Seller - Landlord keep that written opinion in a file in case they need it later. TBer could get an attorney and sue the seller. COULD.

If there is a court case and a seller went through a RMLO, there is no possible ATR case against the seller, IMHO.

@Bill Gulley

Congrats on your 1000th Brian. Seems like there have been many more than that!

What I like about John Jackson's operation down in Texas is that he puts the tenant buyer in FHA loans. That also means quality housing going with FHA.

Brian, I know you deal with nicer homes, loving the better schools as a competitive advantage, that's a good way to go.

While you don't have a question and asked for a comment, it's an opportunity to say that conventional financing programs are the keys to the doors in residential housing.

Installment contracts must begin with conventional loans in mind, the ultimate goal is getting a buyer to meet lending requirements. So to do lease-options or installment sales you need to understand what the target is.

I'll say too that having a tenant-buyer qualify for a financing agreement doesn't mean meeting current lending requirements in every respect, investors need to understand the concepts of underwriting utilizing compensating factors. Many aspects of mortgage rejections in the qualification process can be cured over time leading to a future loan approval. :)

Originally posted by @Bill Gulley

":...conventional financing programs are the keys to the doors in residential housing.

....."So to do lease-options or installment sales you need to understand what the target is.

...."having a tenant-buyer qualify for a financing agreement doesn't mean meeting current lending requirements in every respect, investors need to understand the concepts of underwriting utilizing compensating factors.

"Many aspects of mortgage rejections in the qualification process can be cured over time leading to a future loan approval. :)"

I hope every Lease Option Assignment Operator tapes what I placed in quotes on the wall.

Well said, Bill.

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