Getting a large loan with small income

[Nick Broce]

I've been researching on house hacking a multifamily house, which was recommended by other users to me. However, despite good credit and the (estimated) $25,000 I'll have in one year, I'm skeptical as to whether I could be approved for a loan big enough with my small income. I'm 22 and only make $29,000 a year right now. Some test runs on USAA's website told me I wouldn't be preapproved for a 200,000 conventional loan. Are there ways to work around small income? What are my options?

[Caleb Heimsoth]

Nick Broce you can try to find a lender to include rental income from the other units in a multifamily rental but besides that as far as conventional lending you don’t have a lot of options once your DTI gets above 45 to 50 percent.

Do you have any other debt? Let’s assume you don’t. At 29000 a year you make 2416 a month. So assuming a DTI of 50 percent, you can get a mortgage of up to 1208. So with a thirty year fixed mortgage rate of 5.5 percent. This allows you to borrow about 188000. So that should give you an idea.

Now most banks will have overlays that makes these standards more strict and hence may be why you’re not prequalified.

At this point I would recommend increasing your income. Any way to do that?