All Forum Posts by: Robert Bowles

@Brad Hammond is correct.  The list you are looking at is probably one of many.

We have an application process whenever we use a new builder.  It is not too difficult to complete, but we don't have one list of builders to choose from, and if the client has a preferred builder I tend to walk them through the process before the project gets too far along to make sure they are willing to apply.

Once they are in the system we can reuse them; some seem more agreeable to getting approved than others.

I have had clients use RSW Building multiple times and always have had good experiences with them.

Bob Williford [email protected]

It will not get in the way of qualifying for the purchase.  They will are used to verify your identity, not where you reside.

I purchased a few homes while I was working for an airline in the cities I was based in and never changed my DL nor plates on my car.  It is a non-issue with the lender.  I went 12 years with out-of-state plates and DL.

I assume your bigger question is about the primary residence clause of the loan.  It is always a good idea to read your paperwork, but I would assume it states you intend to reside there for one year....so you would be fine moving back to SLC after a year.

probably better said.....

The 203k lenders that I work with will only work with contractors that they have approved.  If the builder does not meet their standards they will not work with them.

I have worked with Bob @ RSW a few times and he was fantastic.  I usually don't comment as the third recommendation....but he is great.

Keep in mind that your lender will need to approve the builder, assuming they are not already, and if you have a builder that you would like to work with you can see what steps they need to do to get approved.  I have gotten a few builders approved with the lenders I work with and the process is not too difficult (at least from my side).

I had a client do this in Portland and @Tom Gimer seems to be correct (or was in Oregon 5+ years ago).

They had a mortgage on the property.  Subdivided (both lots still under the old mortgage), and then refinanced the lot with the home, selling the new lot.  They did speak to the mortgage holder and got confirmation they would not have an issue with the subdividing as long as their interest did not change.  They would not grant a partial release.

We had to time it so that they refinanced before they could sell the lot, but it worked out great for them.

If you can wrap all the costs into the refinance (pay off the existing loan, survey, and title work) then it looks like you could pull off a "free" lot....or at least have a minimal investment in it.

A lender will want to see a 2-year work history, and your time at school can be used to satisfy the requirement.  Normally you only need a paycheck to show your current employment after graduating.  When there is a gap, a letter of explanation usually goes a good way to satisfy an underwriter, but unfortunately, it may not clear the requirement.  It really depends on the reason for the gap.

I just ran into that issue with a client that took a year off to travel and came back to the new COVID world and it took them a few months to find a new job (co-borrower) and reduced hours to come back to full time at the old job (borrower).   

We were able to get approval with a REALLY good letter of explanation and lots of pushing to the underwriter.  The initial underwriter response to me was:

Addressing Gaps in Employment

For Borrowers with gaps in employment of six months or more (an extended absence), the Mortgagee may consider the Borrower’s current income as Effective Income if it can verify and document that:

• the Borrower has been employed in the current job for at least six months at the time of case number assignment; and

• a two-year work history prior to the absence from employment using standard or alternative employment verification.

From what I understand both borrowers are now at 6 months on the job full time, with this being the case and assuming you can document a 2 year work history before the absence this should be possible FHA it also wouldn’t hurt to have an LOE for the gap.

I'd be happy to talk with you about the gap and see if there is a good way to frame your application to best fit guidelines.

Your income will be your biggest hurdle.  Most lenders will want to see a 2-year employment history (part-time and/or full) to use the income.  But a lender can use past employment, training, and/or education to show particular skills that relate directly to the duties of their current position.  

Using multiple units will also help as @Mark H. Porter suggested.  You can use the rent to help you qualify.  

I assume they have more than the 4/person and more OMMP.

I have heard that some lenders ask appraisers to take pictures of cannabis and report, but I have never seen anything official.  If they are then that might be their way of keeping out of any issues that might come up in the future saving them from future buyback.

Did the appraiser make note about system issues?  Mold, water damage, exposed wiring, overloaded plugs, poor ventilation, etc. Those should be noted in the ordinary course and could be an issue.  But the appraiser is not qualified to opine upon and should not opine upon the system or its impact if any on the structure.  They should stay focused on issues that may affect the value of the property.

I spoke to a few appraisal desks about this and it sounds like they would be hesitant if this is a commercial grow rather than a personal grow, but they would need to see an appraisal to make a determination.  Personal growing should not be an issue, a room full of lights and fans could be one.

Beginning in March we were seeing our lenders no longer accept STR income as acceptable income to qualify.

We hope that these underwriting guidelines will change back soon, but I have not heard any rumors.

Good luck, hopefully, someone here has a lead that is still lending on it.

FYI.  The previous guidelines required 2 years of schedule E income to qualify income.  Then it was looked at as a "normal" rental.  Most of my lenders also had an issue with it not being self-managed.