PenFed line of credit issue

[Patrick Rich]

Has anyone dealt with PenFed FCU in regards to a line of credit on an investment property? They just denied me because they said my properties are showing a loss on my tax return and can't use my rental income to off set my DTI. Has anyone has this issue before and any information of how to resolve?

Thank you!

[Kevin Romines]

Most HELOC's use Fannie Mae / Freddie Mac underwriting guidelines, but not all. As a HELOC lender, they can make their own rules, so its surprising to hear that because your rentals are showing a loss (most do) that they wont take the entire income and overall debt ratio into account? If they denied you just because your rentals showed a loss, but your actual debt ratio was within tolerances, then they have crazy rules that wouldn't be applied by most lenders?

The only thing to do is keep shopping around. I had one of my own internal HELOC investors turn me down for a HELOC. I then went to a local credit union and got 90% at 3.49%, so in the end, I'm really happy the original lender turned me down. Crazy to thing 730 + credit scores and nice sized income with limited debts (no debt ratio issue) would be turned down, but it was for the best as I got way better terms than what my own lender had.

Just keep looking around. Best of luck.