House hack lending advice

[Andrew Toye]

I am wanting to do a house hack. The properties in this area (MLS) go for the mid 300k level. I switched jobs last year. I get paid decent, but some of it is tipped income. VA/FHA sees my income as minimum wage because of this and wont consider the tipped portion until I have been on the job for 2 years. I have a total of 30k saved between saving and 401k, and I have good credit scores. This would be in the northern Rhode Island area.

Is there some way I can finance a 340k-ish mortgage until my full income becomes VA eligible next fall?

Thanks for any advice!

[Anthony Thompson]

@Andrew Toye welcome to Bigger Pockets!

There was a similar question here on BP just yesterday, by someone who was having challenges getting a mortgage with hourly pay.

Basically, it will be probably be an uphill battle and your best bet is talking to a bank or credit union you already have a relationship with, or a mortgage broker who will have access to multiple loan programs.

RI Housing, which was mentioned in that other post, is usually sympathetic to lower income borrowers but their programs have a lot of hoops to jump through and "out of the box" is not a phrase I'd use to describe them. So I wouldn't recommend them for your situation.

You may also need to lower your price point for the house or look into a different area. It's possible you could find a lender who could accommodate you but would want to see 20 or 25% down.

With a 330K house you'd need 66K down payment, so if you can find such a lender you'd need to either wait until you can save the additional amount for the down payment (or get a gift from a relative along with a gift letter), or lower the price of the houses your looking at by looking at a different town or part of the state.

(There are still decent houses in OK areas in the 200s but it all depends on your needs of course.)