STR w/o lease agreement, DTI issues

[Lauren C.]

Hi everyone,

Seems like I might be stuck, but maybe someone has an idea here.

I bought one STR property in Sevierville TN just last month and will being searching for another soon. I used Visio Lending so that I could avoid the intense competition for cabins adhering to conforming limit; so instead of 2nd home loan, I put 20% down on a 900K (FYI no bidding war!) and I'll do the same for the second one...(Visio is great, highly recommend).

I'm going to pull equity out of my primary to pay for most of the next cabin, so my DTI will increase. DTI will not be affected by my Visio loans because they are asset-based loans in LLC name.

Then, I want to head to Gulf Shores, AL (or Blue Ridge, GA) because there seems to be less competition in the conforming loan range...will take advantage of 10% down 2nd home loan w/ conventional lender. 

But, I won't qualify for the full 548,250 since DTI increased due to the increased monthly payment on my primary. (Husband has W2, I quit my job to invest full-time). I want the most gross return from each property, since a less expensive one is the same amount of work, so I want the max loan per Fannie Mae guidelines.

Question: Is there ANY WAY around the fact that I haven't filed Schedule E for the two properties I purchase in 2021, and, because they are STR, have no lease agreements? I want a 2nd home loan, not investment loan, so I can't use projected rent on the subject property. I'd hate to wait until next year until the income from my Smokies cabins count towards DTI.

Thanks. I know others have similar issues with the STR income, too.

[Derrick Dill]

Can you pay off any smaller loans to offset some DTI? Take out of 401k with CARES act LOAN and pay off something else? (401k loan doesn't count against DTI)