Screening for verifying self employed income/section 8 inquiries

[Mike Doubek]

Hi everyone, I am currently in the process of getting ready to rent out my condo but have been a bit overwhelmed with the screening process.  As it stands, I have a couple who are interested and have filled out the application and completed background/credit/eviction checks but there are a number of things that have triggered red flags for me, whether it's out of ignorance of intuition.  The credit scores for both meet my criteria, background and eviction checks are clean and income appears to check out.  Where I am concerned is that both are self employed, have only provided a 1099, one employer and one residence contact each (one of which is a friend letting them live there) so no actual landlords as of yet.  They are supposed newly weds (don't share the same last name which isn't uncommon nowadays but is suspect coupled with everything else) and one has only been in the US for a few years.  Another thing to note is the transunion fraud indicator stated "SSN may be invalid - it was either very recently or never issued by the SocialSecurity Administration" for one applicant and "Current address mismatch - input does not match file" for the other.  I have not received the business/personal bank account statements for the last 3 months nor additional employer/landlord references though one did provide last years tax returns which differ significantly from what the 1099 misc income reported.  Is that normal? 

Needless to say, I don't have a good gut feeling and have been a bit overwhelmed by this all as this will be my first experience as a landlord.  Has anyone experienced this before?  What grounds would I have to deny their application and should I?

Lastly, for the various section 8 inquires I've received, do I have to get my unit qualified for that or can I use some of the previous BP responses stated that it simply is not qualified for section 8 since I have not taken the action to get it approved?  I did my best to scour BP before posting this but some of this was fairly specific and I'm looking for any help I can get on this to make this first endeavor a good one.  Thanks!

[Chris Mason]

- Get a copy of his SSN card, tell him why you are asking. Also line up the SSN to 1099 and tax returns.

- Past addresses is the most unreliable part of a credit report, disregard.

- Women who change their last name when they get married don't always get updated photo ID for weeks, if not months. On any form where it's asking for her name AND photo ID, it makes sense to use the name ON the photo ID that she currently has. Some women do not change their last name at all, that's not a "red flag," that's an "indication that it's not 1924 any more." 

- 1099 income generally does not appear on page 1 of the tax returns. Generally it will appear on Schedule C. And it's normal for these folks to have 4 or 7 1099s, but (first time mortgage borrowers, at least) only give you the one big one, unless you specifically request them all.

Overall, this doesn't appear to be too crazy. The SSN thing is consistent with him being a freshly minted American. Past addresses are quite often off. And the last one is most likely due to you not being super familiar with how independent contractors report their income to the IRS.