Family vs The 2 Year Rule?

[Erick Vallejo]

Hey BP members! So I've heard a lot about this 2 year rule that some lenders require in order for your rental income to count towards your DTI. My question is, do siblings count towards this "clock"? My younger sibling just turned 18 and will be living with me in my primary residence while they are attending college. They can not afford much so I figured just $50 a month would be enough to start my 2 year "clock". They are legally an adult and legally paying rent (even though its only $50). I don't see why this WOULDN'T count, but I just wanted to make sure. Does a lease need to be in place? Can it just be a simple bank transaction? Any advice would be great. Thanks!

[Chris Mason]

Originally posted by @Erick Vallejo:

Hey BP members! So I've heard a lot about this 2 year rule that some lenders require in order for your rental income to count towards your DTI. My question is, do siblings count towards this "clock"? My younger sibling just turned 18 and will be living with me in my primary residence while they are attending college. They can not afford much so I figured just $50 a month would be enough to start my 2 year "clock". They are legally an adult and legally paying rent (even though its only $50). I don't see why this WOULDN'T count, but I just wanted to make sure. Does a lease need to be in place? Can it just be a simple bank transaction? Any advice would be great. Thanks!

 I'm seeing a Schedule C sole prop business in your future tax returns, called something like "Erick Vallejo College Student Hosting & Support." 

Two year income average will likely be used. Based on tax returns, not on your bank statements or anything else.