All Forum Posts by: Joshua Jones

@John Warren thank you. @Collins Van Liew the main issue you might have is what is called an accessory unit. If the home is zoned as single family, as you state, then you will need to make sure whoever buys it, is using a direct lender. So typically not your banks as they tend to have a lot of overlays. It will all come down to the appraiser and are they going to state it is an accessory unit or a full blown rental unit. That will determine a lot. If the buyers new lender states its a multi-unit, that is different rates for the buyer, down payment requirements and more.

@John Warren thank you. @John Magnusson you stated in your list of items above that you are "buying out your PMI." That is a term that is reserved for conventional loans so i am assuming you are doing a conventional loan single family. That percentage is based on your down payment and credit score. The only thing the the lender really controls is lender fee (and their company sets that), and if there's any origination fee. That's it. The rest is third party fees.

Why are you buying out the PMI? If you have good credit, it is not a lot per month.

Thank you @John Warren. Julio, if you want to talk, let me know and i can be a resource as well to help discuss anything and everything with.

@Cameron Burnett, the VA loan is a really cool and niche product. What did your lender state about being able to use rental income in order to qualify? Also what did your lender state about the fact that you will receive a reduced tax bill in the future, but the place you are potentially buying will most likely have a full tax bill associated with it?

I always advise working with a lender and agent who truly knows the VA multi-family product. The two items I pointed up above will cause issues if not addressed up front. VA does not follow FHA guidance for rental income and multi units which most bankers are not aware of unless they truly know the VA product. Then you have the added layer of the reduced tax bill issue as well. Plus VA does not follow Debt to Income, they follow what is called residual income.

If you have questions, please reach out as I handle tons of VA loans every year.

@Juan Alvarez for lending there is no difference from a co-signer or co-borrower. Both are on the loan and both have to take their income, assets and credit into consideration. There is a misconception about these two terms but in mortgage lending they are one of the same.

Hi Juan

The answer in short is no, but it's all how you set it up. There are a lot of specific rules to this and it also depends on what type of property, payment history and more.

Feel free to message me and we can talk further.

Adam

Technically you do not need experience and you can use fair market rent vs actual rent as long as the places are vacant or have a month to month lease. 

If you would like we can discuss this further. Feel free to reach out. A lot of banks and lenders have what are called overlays. Those are rules on top of rules. 

@Jason Bohling there are a few comments in your questions I want to address. With regard to the cap you are referencing, the "no cap" anymore DOES NOT apply if you already have a current VA loan. If you have a current VA loan, you are bound by the current caps for your county. If you have full entitlement, then YES there is NO LIMIT to the VA LOAN. If you do not have full entitlement (i.e. a current VA loan out) then a cap applies. VA is a very niche product. Most lenders do it, but not everyone knows the rules.

For landlording experience this is what is subject to an underwriter. Typically it can be if your career is a related to property management or you have 1 year of taxes with rent being claimed would count. 

Or if you hired a management company to manage your place, you can use a portion of the rent and use that as well.

Hi Paul

This is a unique situation. The issue is that your place is Free and Clear and trying to do a cash out VA loan. If you want, let's talk and i can walk you through it.

Hi Brad

I am a lender and the guideline you are referencing is an actual guideline. There are some rules with it and it rarely comes up. If you just took a VA loan as owner occupied recently, that could be an issue with justifying a new primary residence. Also how close this new place would be to your current place, that could be an issue as well.

However, in theory you can use that rule.