House hack loan

[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 

[Chris Seveney]

@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

[Gregory Schwartz]

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. 

[Chad Rocke]

@Daniel Toshev

Just sent you a DM

[Derek Brickley]

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.

[Chad Rocke]

@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).

[Jay Hurst]

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.  

[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

[Jay Hurst]

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?