All Forum Posts by: Anthony Rondinelli

Hi, Shane,

I work with Milwaukee County Housing Services as a Landlord Engagement Coordinator.  We have a mixed bag of federally subsidized, as well as non-federally subsidized rent assistance programs, many which abide by rent assistance Housing Quality Standards requirements.

For Housing Quality Standards, screens are not actually required...if they are present, though, they must be in good condition so as to not posed a cutting hazard or other health and safety risk

Hope that helps

That is not how it works. If you have a PITI that will be 4000 dollars, but the property will bring in 5000. You will take 75% of that 5000 which is 3750. So, that would add 250 dollars to your debt to income ratio. In your example above now your debt goes from 3000 a month to 3250 a month. so, your DTI HAS gone up but only to 32.5% from 30%.

Look at this form from Fannie. You would be looking at the bottom section step 2b: https://content.enactmi.com/documents/calculators/Form1038.C...

My post broke the quick math down of your hypothetical situation. It shouldn't be affecting your DTI negatively unless something's wrong. Since 75% of the proposed income more than offsets the PITI of the loan, it's a wash. I don't know where you are, but you might want to get another analysis. If you're in CA or AZ, feel free to reach out. And to answer your question, yes, DTI issues are usually why investors start using DSCR loans. Which I also have experience doing.

@Anthony Rondinelli..lenders have different nuances that have to be taken into account. It's not a one-size fits all. Some lenders are going to have overlays or not understand how to actually calculate rental income properly (full disclosure - I've closed loans that were turned down because of a banker or loan broker not understanding how to calculate income). There are lenders who even if you haven't filed your taxes can use the income to offset your PITI, which should barely raise your DTI, especially in the type of example that you mentioned. While you can't use any overage to help your income, you can offset (if the rents are enough) for a 1:1 and basically have no add to the income. In your example. $6,500 x .75 = $4,200 which covers $4,000 PITI. While you cannot use the $200 overage for income, it becomes a wash for the debt taken on, and should add nothing to your DTI. PM if need more info.

Greg brings up a good point, but keep in mind you can only offset the subject property income by using 75% of the rent UNTIL you file it on your tax returns. Only at that point can an underwriter recognize it as an income producing property.

You are talking to the wrong mortgage people.  It is very common for the typical bank mortgage person to make this mistake.  I've heard it first-hand.

A mortgage person that understands income producing properties applies 75% of the rent towards your income. If you are buying cashflowing properties, your DTI should improve with every property.