Rental Income qualifications for new HELOC DTI

[Doug Bielecki]

Hey oh, did some searching to no avail. Could use some BP insight!

Current situation: Looking to pay down some debts in-order to secure a high valued Fannie Mae refi today @ $765.6K, their max. Live in Bay Area, CA in a home valued at ~$1.1M and have already been pre-approved.

The product: Once I secure the refi, I'd like to immediately take out a HELOC on the property. Pen Fed's HELOC allows up to 50% DTI for up to 90% CLTV.

The issue: We put our "Old" house on the market as a rental this year, and have a 12 month agreement that went into place end of February 2020. We're collecting $4,250 in rent and expect to be per the agreement.We dont have 2 years of W2 on the property proving out stability/tenure, so how will the income from this be considered? What have you other investors seen done here for this?

The feedback: I've spoken to the loan agents from Pen Fed (only them at this point) and have received answers ranging from, "well, you'll just have to go through the underwriter process to find out", or from another of their agents, " our loans are more strict than Fannie Mae so no guarantees".  

I'd like to have some line of sight on this before we kick of the process hence my reach out. What are you guys seeing done here? Sounds like whether I'm at 45% DTI or 50%, 80% or 90% CLTV does not matter.

Would love some perspective from those that have dealt with this in today's environment.  Thanks all!