All Forum Posts by: David Cherkowsky

 @David Cherkowsky    This form is used:  https://content.enactmi.com/documents/calculators/Form1038.C...    This is what I recreated for you the other day. 

 @David Cherkowsky The above is absolutely correct, BUT do not assume you cannot qualify for a conventional loan. Make sure a competent LO with a NMLS number runs the numbers from you. My team has conversations all the time with borrowers, especially those that own real estate, that thing DSCR options are their ONLY options. But, guess what they are not loan officers or underwriters so they turn out to be wrong. (do not trust me to build the house, but I do know how to qualify you FOR the house.) Don't disqualify yourself without talking to an expert.

Hi David,

There are lenders that will allow you to purchase via a DSCR loan using STR income to qualify. However, they will not allow you to live in the property at all, full stop.

This is because DSCR loans do not follow/ pass consumer protection laws. when you live in the property, it creates massive problems for this loan type and the lender which would issue it to you.

For that reason, most of these lenders want to ensure you OWN your primary residence. Some will let you rent your primary and still do a DSCR loan on the subject, however, this would come with the added scrutiny of really documenting and evidencing you have no intention of moving in to the subject.

Try both Old Glory Property Construction and Oakwood Builders. 

 For Conventional, you can only use 75% of the gross rent until you have Sched E history for the rental for a net rental income analysis. Also, you will likely only be able to use the rent to offset the mortgage pmt debt on the rental property to $0 since you dont have any Sched E history yet. 

For FHA, I would ask your lender to confirm that they considered the 100 mile rule in calculating DTI. I've seen lenders miss this and blow up loans on several occasions, and Im getting a little of that vibe here.

I like this train of thought and think you should aim for option 3: conventional loan + lower downpayment (perhaps even lower than 10%). Your lender definitely should be able to count the 75%- I'm in Arlington and would be happy to connect you with my awesome lender who has been able to do all kinds of creative options to get to yes for me. For context, downtown Alexandria performs super well as a rental market and bringing in $5.5k+ as the monthly rental income if you choose to move out of the househack in the future will be absolutely feasible (depending on the property of course). Therefore, bringing as little to the table as possible at closing in both the downpayment + closing costs should hopefully still make your numbers work. Best of luck!