All Forum Posts by: Stephanie Medellin

@Todd Fullerlove  Most lenders will go by the lowest middle score of all borrowers on the loan, so bringing in someone with a higher score may only help if they are the only person on the loan.

@Tyler Clark  

https://www.biggerpockets.com/forums/49/topics/644034-financing-scenario-question-template

@Thomas Wood  It may be easier to try to work within the lending guidelines and programs that exist to accomplish what you're trying to achieve.  I don't know the size of the house or the extent of the renovations needed, but if you can minimize what needs to be done to make it habitable, and keep the loan amount to conforming limits for your area, you could use a Homestyle Renovation loan to purchase and rehab the property.  Maybe there are some "luxury" projects that can be delayed until you're living in the home to cut down on the budget.  Once you're living there, slowly finish whatever other projects are remaining.  Maybe there is some historic restoration work that isn't 100% necessary for your lender, but that costs a lot and can be done later?  

The limit on eligible renovation funds has been increased to 75% of the lesser of the purchase price plus renovation costs, or the “as completed” appraised value for purchase transactions; and 75% of the “as completed” appraised value for refinance transactions.

@Ella Myers If your middle score is under 620 you will likely be limited to FHA. If you can qualify on your husband's income alone, you will likely get better terms with only him on a conventional loan.

@Peter Jaglom  It's highly likely there are options in between 3.125% with 2.675 points and 3.75% with 0 points.  Ask what are the costs for 3.25%, 3.375%, 3.5%, 3.625%.  There may be an option in there that doesn't cost too much and would be paid for in less time than 6-9 years.  Obviously the cost of paying points depends on how large your loan amount is.

@Aaron Moayed She is getting the correct information. Some of the alternative loan programs do allow title in an LLC.

I have asked this question to many of our lenders and no one will do a manufactured home on a land lease.  Condos on leased land are possible, but not manufactured even if it is on a permanent foundation.  The guidelines for condos is the lease has to extend 5+ years over the term of the mortgage.

@Aaron Hale If you do a cash out refinance (conventional) and use it to pay off the debt incurred in buying and rehabbing the property, the monthly payments on that debt will not factor into your DTI, so that shouldn't really be a concern. The only concern might be a drop in your credit scores due to high utilization of credit lines.

The new monthly mortgage payment from your cash out refi will be netted against 75% of the rental income from your new lease.  As long as that covers the new payment, and you otherwise qualify with your regular self-employment income, I don't really see an issue. 

The house will need to be finished and in habitable condition when the appraisal is done. You will need to take it out of the LLC, but should be able to count the time it was owned by you in the LLC as part of the 6 months seasoning.

Again, I'm not really sure what the issue is (considering the other responses).  You said you can manage to finish the project.  You will be taking the debt that's unsecured right now and refinancing it with a mortgage on the property.  The rental income on the property can pay for the mortgage.  I haven't gone so far as to analyze all the numbers, but $115,000 loan amount will have a reasonable payment.

If you can't qualify conventionally, there are 30 year fixed rate lenders that qualify you based on the income of the property, and you can continue to hold title in an LLC. The most important thing you can do right now is finish the project and keep all payments current.

@Cong Zhao  I'm not sure about the State Housing loan, I would try looking for any guidelines if they have a website, or call in the morning to find out directly.

As far as appraised value - the lender is always going to go by the lesser of the appraised value or purchase price - in your case that would be $118,000.  The buyer would need to pay the extra $7,000 out of pocket.

@Westlake John  You'll get some better feedback if you provide more information.  There's a very helpful template that's on the top of this thread: https://www.biggerpockets.com/forums/49/topics/644034-financing-scenario-question-template

Loan purpose, occupancy, credit, etc., are all factors in qualifying for a loan, even a hard money loan.