All Forum Posts by: Stephen Nava

Are we talking about residential rental properties? The down payment and credit score is a great start to obtaining a loan for a property. The banker will look at your income against all of your liabilities, which means that you must meet the bank's debt-to-income criteria. The rental income from the properties you are interested in buying can be used as income. However, you might be require to provide a one-year lease agreement showing the amount of rent that will generate from the property. Also, the total rent you will receive is not completely used as income, for that the underwriter takes into consideration vacancy reserves. My advice would be to talk with your friends, family, or partners to come up with a game plan and provide income for you to qualify for the loan. Having another person co-sign the loan will raise your income. I am confident that you will do fine. I closed on my first deal at a 580 credit score working in a pizza restaurant.

A four unit complex is not considered a commercial property. A person can used the FHA loan on the four-plex, but look out for the loan criteria. Some mortgage companies required two of the four units to cover the mortgage payments. Using an FHA loan on a four-plex is a great way to jump start a residential investment career.

A person is able to use the FHA loan on one property at a time. That person must live in the property for a certain number of months, I think at least six months. If a person bought their first property using a conventional loan, he or she can still take advantage of the FHA loan for the second property. If a person used the FHA loan on their first property and would like to use it for the second property, the first property must be refinanced into a conventional loan in order to use the FHA on the second property. In some cases, the borrower must provide a letter to the mortgage company stating why the FHA loan is being used on the second property. The borrower can not use their name on two FHA loans on two different subjects. If you have a spouse or partner, that person can carry the loan for the second property.

I suspect that the bank is running a credit check on your father-in-law for the loan because some the down payment is coming from your father. The bank wants to know if your father-in-law took out a loan for the down payment, which could mean there might be a liability. The best advice I can give you is to simply ask the loan officer if it is a requirement to pull your father-in-law's credit. It might have something to do with your debt-to-income ratio. Sometimes bankers do not know what your intentions are and might assumed you wanted your father-in-law to be on the loan.