How to Get a Loan for a House to Rent Out Rooms When Unemployed with $90k Saved?

[Lea Ramirez]

Hey everyone,

I’m looking for some advice. I’m currently unemployed but have managed to save up about $90k that I want to use to buy a home. The plan is to live in part of the home and rent out the other rooms to cover the mortgage and generate some income. 

Here’s the catch: I’m not sure how to go about getting a loan with no current employment. I’m based in the NY/NJ area, and I’m exploring a few different options:

1. Bank Loan – I know banks usually require steady income to approve a mortgage, but would a large down payment (maybe 20-30%) and good credit be enough to get approved? Has anyone successfully qualified for a mortgage in a similar situation? Should I consider getting a co-signer, and how would banks treat potential rental income?

2. Private Money Lender – I’ve heard they can be more flexible and might focus on the property value more than my employment status, but I know the interest rates are higher than conventional loans. Does anyone have experience with these lenders? Is it worth it as a first-time investor?

3. Hard Money Lender – I’m aware these loans are based on the value of the property and not your personal situation, but the interest rates (10-15%) and short repayment terms are a bit intimidating. Are they worth the risk, or is it better to avoid as a new investor?

4. FHA Loan – Since I plan to live in the home, would an FHA loan be an option? I know they require less down, but with no income, is this a possibility, or am I out of luck without steady employment?

5. Other Creative Financing – Are there any creative financing options I should be aware of? Seller financing, rent-to-own, or DSCR loans based on rental income?

My goal is to avoid getting into something with crazy high interest rates, but I’m also realistic about needing to be flexible given my unemployment. I’m trying to be smart with the $90k, so any advice from those who have been through something similar would be greatly appreciated!