All Forum Posts by: Upen Patel

@Bryan O. Right, if they need the rental income from the property they are exiting, then they have to be at least 100 miles away.

@Wayne Brooks Nope. It applies to any primary to rental conversion. Basically the agencies are trying to clam down on folks using primary residence financing and moving every year. FHA has the toughest guidelines of all for that.

@Daniel Dietz Since you already have ownership in the property, this would be more a quit claim transaction vs a purchase. In that scenario you would be doing a cash-out refi and can get a max of 85% LTV under FHA.

The only way you can get 10% down (or something like that) is if you buy out the other party in the LLC (maybe by using hard/private money), so that now you own 100% of the LLC. Now you can do a rate-term refi on the existing loan on the property and payoff the hard/private money. As part of the refi get the title transferred from the LLC to you. A long winding road, but it can be done.

Make sure you are working with a good hard/private lender and good mortgage banker.

Good luck.

@Bryan O. Below is the except from the FHA handbook.

"Rental Income from other real estate holdings may be considered Effective Income if the documentation requirements listed below are met. If Rental Income is being derived from the Property being vacated by the Borrower, the Borrower must be relocating to an area more than 100 miles from the Borrower’s current Principal Residence. The Mortgagee must obtain a lease agreement of at least one year’s duration after the Mortgage is closed and evidence of the payment of the security deposit or first month’s rent."

@Jeff M. As you have already found out, non-warrantable condos are a pain to get financed. On top of that your loan size is too small and its an investment.

If you do find a lender, be ready to do an ARM loan. They will amortize it over 30 yrs, but very unlikely that you will get a 30 yr fixed.

@Kristen Lawrence Welcome to BP

@Toben B. in addition to what @Shaun Weekes said, the new property will have to be at least 100 miles from the property you are exiting. FHA is strongly enforcing this rule.

@Andrew R. If you are looking at conventional financing, then Fannie/Freddie guidelines are what most lenders follow. Some will have more restrictive overlays.

Conventional loans are for 1-4 unit residential properties. Generally, for SFH/TH/Condo its 20% and 2-4 unit is 25%. If you have more then 6 financed properties, then the down payment will go up by 5%.

@Himan Baroi Welcome to BP.

@Jonathan Johnson @Andrew Michael @Jeremy Motte

Yes, a 2nd, or more, VA loan is possible as long as you have not exhausted your VA loan benefit, have a valid reason for requesting an additional VA loan (e.g. moving due to a job). In this particular scenario, VA will even allow you to use the rental income to offset the mortgage on the old property.

As you know the VA benefit amount changes based on the # of units and the county. So it does get very crazy to be able to determine left over VA benefits. Its best that you work with a knowledgeable VA mortgage banker.

@Oded Levy There certainly are banks/lenders that will lend to foreign nationals. The LTV and loan terms are not as attractive as conventional loans. So you need to find those lenders.

Good luck.