Financing 2nd House Hack while keeping first house hack as rental

[Jack Casica]

1. TL;DR: My DTI is too high to qualify for another mortage. What are some options?

My goal this year is to get into a second house hack! BUT I would also like to retain the home I am currently living in as a rental. There are definitely some financing hurdles to figure out before making this a reality.

Here are some notable circumstances:

• - My current house hack has a conventional loan and I have about 8% equity in the house
• - I have been in the primary house hack for more than a year.
• - Although house hacking has allowed me to save more than 60% of my income, on paper, my current mortage puts my Debt-to-Income ratio considerably high thus disqualifying me from financing. 
• - If I were to include the rental income that I would continue to collect from this primary property, it would put me under the 43% DTI lending standard BUT (BIG BUT) I have read that lenders do not allow you to include rental income if its not noted in at least two years worth of tax returns.
  

Some options include:

• Taking out a hard/private money loan for a higher downpayment,thus lowering the conventional loan amount and my Debt-to-income ratio
• Adding a co-borrower's income to mortgage application (then refinance at a later time without them)
• Find a lender who is willing to accept my rental income despite it not showing on 2-years worth of tax returns.

Of course, the easy solution it to lower my DTI by selling the primary house hack. This is not ideal and I think that other reasonable solutions exist.

[Derrick Dill]

You mentioned you've been house hacking your primary for more than a year. Did you include rental income on 2018 and 2019? if so, this is 2 years rental income on your tax return. If not, I'm sure you have at least one year. Can do your 2020 tax return ASAP and start house hunting Aprilish 2021 with 2 years of rental income included.