Issues obtaining Conventional loan due to unique job

[Brandon Gall]

Hey, BP community, 

I am running into issues trying to obtain a conventional loan for a duplex. I currently own two duplexes and one single family in the area that cash flow well. I am an overseas government contractor with a good income. I have been in the career field for over a decade. I work two months on and two months off (this also makes closing tricky as I'm not paid while I am home even though I am a W2 employee). I am currently in my second rotation on an "indefinite contract". Before this, my wife and I went on a two-year sabbatical to go sailing. Before that, I was doing the same contract work and rotation schedule for three years just with a different company. 

The problem continues to be I don't have a year's worth of employment records to appease the Fannie Mae requirement. Are there other options to obtaining a loan? Could I use my LLC that the properties are in as a year's worth of income, supplemented with my current personal income? The lender I have been working with hasn't come up with any solutions other than it can't be done.

Would love to hear your guys' input. 

Thank you BP community and happy holidays!

-Brandon

[Andrew Postell]

@Brandon Gall there are plenty of other options with acquiring a loan.  

Generally speaking there are 2 main types of loans for investors: “Conventional” and “Portfolio”

Conventional - I'll define these as loans that come from Fannie Mae and Freddie Mac. These loans are all 30 year fixed rate loans. They have the lowest rates we can find and since they are 30 year fixed...they allow us to cash flow better...which helps us qualify for other loans later. The draw back to these loans is that they are more paperwork heavy than the other "portfolio" types of loans....but if you have ever received a loan on your primary home, it's likely that you will go through the same type of paperwork here with conventional lending. Fannie/Freddie money = Fannie/Freddie rules. NOT the bank's own money.

Portfolio - I'll define these loans as loans that come from the bank's own "portfolio" of money. Sometimes referred to as "commercial" loans. Sometimes called "DSCR" loans. Sometimes called "Bank Statement" loans. These loans are a lot more flexible than "conventional" loans. Bank's money = Bank's rules. If they like you, then maybe they will lend to you. But since there is a limit to how much money the bank has access to....their rate will be higher...and it might have a prepayment penalty to it. When we speak about these loans, we need to know ALL the terms to them. However, these don't need any personal income. They are based on the income of some other nature...like the rental income of the property for example.

And that "portfolio" style loan is the loan type you need.  

Hope all of that makes sense.