Have a weird situation where I recently purchased a rental property 1 year ago and am looking for a new loan on a new property. I have great credit and W2 income to purchase a property before my rental income (~2k a month net). The rub is I invested ~100k in the first year in deferred maitenance + upgrades/remodels and the underwriters say that they cant use current cashflow & new leases and have to use the old 2022 Schedule E numbers which are low from vacancy, old leases & insane 1x deferred maintenance bill from purchase.
Do you know if I am simply SOL if I want to qualify for another conventional loan until I get my 2023 Schedule E next year? I'm actually cashflowing >2k a month on the property now but they are basically telling me its -5k / month given the now very outdated 2022 schedule E. Is this just a bad underwriter or is that underwriting policy everywhere?
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
3y
Sam,
You are dealing with an underwriter that has internal overlays. You have a couple of options you can get an appraisal on the property and have the UW use the 1007/Common rent if the rent schedule shows enough to "Wash" the payment. It will remove the negative net rental if they allow that option but some UW's are under tight guide lines. You can also switch over to a DSCR loan and avoid the income and DTI all together.