Lending for house hackers.

[Mark Leavitt]

Hi, I am a house hacker and nomad real estate investor in Northern Colorado. Basically utilizing all the lending rules to give me the opportunity to buy rental type properties with lowdown payment. Being a Reltor as well I have lots of crazy lending stories but this one that happened to me personally takes the prize. I just hope this story helps you avoid my mistake and not claim your earnest money. 

I am currently under contract on a small duplex in my market of northern Colorado, I was set to close on Oct1 on the property. I was told by my lender that everything was running soothly because I am a well qualified borrower, I have everything that a lending company would like to see from a borrower. But 3 days before closing my lender called me up to say "We are sorry, but due to wording in my home owners policy we will not be lending to you on this property." It turns out that as standard practice on my home owners policy through nation wide, under a heading "other inclusions" there is a coverage for "Landlord furnishings" and due to this wording I was no longer qualified for the loan.  

Because of all the other hoops I had to jump through from this lender, things like writing them a letter explaining why I wanted the home, getting a signed lease for my current house hack, And the time waisted from them as they had my home oweners policy 3 weeks before all this. I lost my Ernest money and the money I put in to the deal.. (home inspection and appraisal).

today I am still scrambling to make this deal work, and am still hoping to close on it with a different lender this month. But be leery of lenders that will tell you they can provide the world but in the end its there underwriter that will take it away from you. And make sure you fully look over your home owners policy before you submit it to the lender. especially if you are house hacking or nomading your way to finical freedom. Keep out any wording that states landlord or rental property terminology. Also on your contracts if you are working with an agent. Always try to slip in loan termination deadline as close or on the closing date, incase anything like this happens to you. I hope this story helps you in your next house hack purchase.