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Updated over 7 years ago,
FHA Approval Using Market Rental Appraisal
Hello everyone,
I am about to place an offer on a 4-unit property. My intention is to use an FHA loan, but I will need the rental income from the property to qualify.
My lender tells me this already makes it a challenge. To add to it, the property is vacant. Luckily, FHA guidelines allow you to qualify after having a market appraisal of the rents done. My lender tells me that this is a difficult process and almost never succeeds because the comparable properties have to be very similar to get a rental appraisal from them.
To me it seems like the rents could come in very low and I could still qualify because the asking is only a small bit above what I was pre-approved (still to much for me to cover with cash) for on my own.
Has anyone been through this process to get approved? What are the chances they will be unable to give an estimated rent number at all, does this happen?
My figures show if the offer is accepted, but the underwriters reject my file I am only out $600 + time for the appraisal. As I mentioned, being very conservative with the appraised rental value of the units it should be plenty to qualify. Looking for advice from experienced investors/lenders.
Thank you everyone!