House hack loan

Denver, Colorado
Private Lending & Conventional Mortgage Advice
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House hack loan

Daniel ToshevPro Member
Rental Property Investor · Denver, CO · Member since 2020 · 29 posts · 16 votes

 Hello, everyone. First time posting. 

  So, after few years investing out of state I decided it's time for a house hack. The house that I live in is very easily devideble. So I turned it into a up-down duplex. I'm renting the top and got a roommate on the bottom. 

  So that's 2 rental agreements and 2 rental payments coming each month. 

  However, when I tried to get pre-approval for a new loan I was told I can only use 75% of the average rent for the area. Even though I have the leases and can show a few months of payment I have to wait to do my taxes and show the rental income there until I can actually use that income. And that's a mortgage broker I've used a few times and trust. 

So, is there any way around that, or do I just wait until next year? 

  Thanks 

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y

@Daniel Toshev

Not really as I believe a DSCR loan does not allow you to owner occupy it. Some lenders may be more aggressive and count the 75% from the leases now. Only way to find out is to start calling and reaching out

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Daniel Toshev

    Not really as I believe a DSCR loan does not allow you to owner occupy it. Some lenders may be more aggressive and count the 75% from the leases now. Only way to find out is to start calling and reaching out

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  • Gregory SchwartzBusiness Member
    Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
    2y

    Each lender is a little different. And unfortunately, some loan originators will say one thing and then their underwriters will say another. I would make sure you're calling lenders who are experienced with owner occupied multifamily loans. 

    [email protected]443-812-0357
    Schwartz Realty Group5117 Reviews
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  • Chad RockeBusiness Member
    Real Estate Agent · Denver, CO · Member since 2021 · 383 posts · 181 votes
    2y

    @Daniel Toshev

    Just sent you a DM

    [email protected]715-550-1731
    Rocke Real Estate Inc.547 Reviews
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  • Derek BrickleyBusiness Member
    Lender · Ann Arbor, MI · Member since 2021 · 668 posts · 227 votes
    2y

    Hey Daniel,
    If you’re looking at conventional loans then that will be the case.  Freddie/Fannie dictate that in their guidelines.  If you were looking for non- qualified mortgages there could be a difference.

    [email protected]734-645-7722
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  • Chad RockeBusiness Member
    Real Estate Agent · Denver, CO · Member since 2021 · 383 posts · 181 votes
    2y

    @Daniel Toshev

    I received some good info that might make this possible for you.

    Give me a ring happy to discuss more I can connect you with Danielle.

    From my go to lender:

    Danielle Anderson

    Loan Officer

    the leases would need to be specific that they are only a portion of the home (Basement) and upstairs. We would NOT need to order a 1007 market rent report if we had either:

    1st months rent and security deposit

    2 months of rent deposits (canceled checks)

    If it's a departing residence we could only use rental income to offset monthly payment (we couldn't use extra income if 75% of the lease was 3,000 and mortgage was only $2,500 I couldn't give $500 of income to boost DTI unless he has moved out of the home for some time and we have 1 year of history of being a landlord (which it sounds like we do, just not sure if he's just moving out of this home).

    [email protected]715-550-1731
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  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Daniel Toshev:

     Hello, everyone. First time posting. 

      So, after few years investing out of state I decided it's time for a house hack. The house that I live in is very easily devideble. So I turned it into a up-down duplex. I'm renting the top and got a roommate on the bottom. 

      So that's 2 rental agreements and 2 rental payments coming each month. 

      However, when I tried to get pre-approval for a new loan I was told I can only use 75% of the average rent for the area. Even though I have the leases and can show a few months of payment I have to wait to do my taxes and show the rental income there until I can actually use that income. And that's a mortgage broker I've used a few times and trust. 

    So, is there any way around that, or do I just wait until next year? 

      Thanks 


     Are you trying to refi the property you currently live in or trying to buy a new property?  The answer will change just a bit on how the income is calculated.  

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  • Daniel ToshevPro Member
    OP
    Rental Property Investor · Denver, CO · Member since 2020 · 29 posts · 16 votes
    2y

       Thanks, everyone for taking the time to respond. 

        Yes, I'm trying to buy the next house hack, I guess I didn't make that clear. Unfortunately, seems like it will wait till next year because of this rule. As it is I'm left, on paper,  responsible for almost $1000 of the current mortgage and can't qualify for enough to buy what I'm looking for

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  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Daniel Toshev:

       Thanks, everyone for taking the time to respond. 

        Yes, I'm trying to buy the next house hack, I guess I didn't make that clear. Unfortunately, seems like it will wait till next year because of this rule. As it is I'm left, on paper,  responsible for almost $1000 of the current mortgage and can't qualify for enough to buy what I'm looking for


     You said the property is a duplex correct? And you have a tenant in the unit you are NOT currently living in correct? What date did you get this lease signed?  

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