Help! Student Loan Debt Considered for FHA & 203k loan

[Ashley Sanchez]

Recently, spoke with mortgage broke to attempt to qualify for my first MFR to 'househack'/rent. I provided him my general background: Have 140k student loan debt 37 k annual salary Credit score of 700+ He said that with the new rule of considering student loan debt I would not qualify for a mortgage because of him having to consider the payment. I told him I wanted to use the FHA loan to fund a rehab property under 80k and then get a 203k loan for rehab work. I'm truly getting discouraged because of it's not one thing it's another. If is not your DTI is too high, now it's student loan debt. Can some advise if he is correct or if their are other loan avenues or lenders I can consider?

[Shaun Weekes]

@Ashley Sanchez

First off a 203k loan is an FHA loan. FHA has a wide range of loans from your standard FHA loan, 203K, reverse mortgage and streamlines.

Second if you're going to buy a 2-4 unit home did your broker include future rents in the calculation?

FHA will calculate 1% of student debt so in your case that's really high compared to your income. $1,400 a month and you make $3,083 So right off the bat your DTI is 45.4%. With your fico score you'll be able to go to around 52% (maybe more but unlikely because of the type of loan you're applying for)

Hopefully you don't have a car payment, c.c. or any personal loans because that might push your DTI over the top.

You're going to need to provide market rents for me to finish off this very quick and basic analysis. But let's say you buy a 4 plex for 100K and the rents in the other three units are $400 a pop. That's an additional $1,200 in rents and with FHA you can use 85% of leases towards your income. So now you have $1,020 more dollars towards your income and now you're making $4,103 a month instead of $3,083 a month. Multiply $4,103 x 52% =$2,133.56 - $1,400 = $733.56

This now means that you can get a home with a mortgage payment of $733.56 or less.

That's approximately 90K - 100K

This is a lot and it's complicated so you need to find someone who knows what they're doing and work with them to find a resolution.

NEVER GIVE UP!!!