Credit Score: A credit score of 650 or higher is required.

Here are some general guidelines: Lien Position1st Position LienEquityMinimum Down Payment of 20-25% (a 30% equity to sale price is preferred)Down Payment made in certified funds and not borrowedMaximum Funding of 70% ITV (Investment to Value)SeasoningMinimum of two monthly payments already made12 months or more preferredPayer CreditCredit Score of 650 or higherNo major derogatory trade lines (No 90-180+ days delinquent, foreclosure, repossession, bankruptcy, etc.)No decline in credit since purchase of businessTermsPrefer 60 months or lessMaximum of 72 monthsNo Balloon Payment preferredCash FlowBusiness has positive cash flow1.25 debt service coverage ratio preferred.DocumentationPersonal guarantee from a creditworthy individualStandard documents including Note, Security Agreement, and UCC-1 filing.Tax Returns on the business that substantiate profit and loss statements.OtherPayment history current and verifiablePayer Interview indicating buyer is satisfied with business and comfortable making paymentsMotivation for selling the note is not a result of a deteriorating businessConsideration of high risk businesses or geographic areasIn these situations, sometimes a partial is a better option. 

Wait... you never checked their credit score????

The problem with using credit card funding is it destroys your DTI and thus lowers your credit score.

For example, require a minimum FICO score of XXX, gross monthly income X times the rent, and verifiable income for the last X years.

Here's how they break down:Fannie Mae HomestyleMinimum Down Payment: 3%-5% (Primary Residence) & 20% Down (Investment/Second Home)Credit Score: 620Minimum Loan Amount: $50,000Maximum Loan Amount: Per County Loan LimitsOccupancy Types: Primary Residence, Second Homes, and Investment PropertiesUnit Maximum: 4 UnitsAcceptable Renovations:-Structural Improvements (e.g., new roofing, foundation repairs)-Cosmetic Enhancements (e.g., new flooring, updated bathroom/kitchen fixtures)-Energy Efficiency Upgrades (e.g., solar panels)-Accessibility Modifications (e.g., ramps, widened doorways)-Luxury Items (e.g., pool)-LandscapingNot Acceptable Renovations:-Commercial Use (e.g., turning a residential property into a commercial property)-Temporary Structures-Non-Residential Buildings (e.g., barns, stables)FHA 203(k)Minimum Down Payment: 3.5%Minimum Credit Score: 620Minimum Loan Amount: $50,000Maximum Loan Amount: $524,225Occupancy Types: Primary Residence ONLYUnit Maximum: 4 UnitsAcceptable Renovations:-Structural Improvements/Reconstruction (e.g., adding rooms, bathrooms)-Cosmetic Enhancements-Eliminate Health and Safety Hazards-Energy Efficiency Improvements-Major Landscaping (e.g., grading, tree removal, adding walkways)Non-Acceptable Renovations:-Luxury Items-Commercial Use-Temporary Structures-Non-Residential BuildingsBoth of these renovation loans are similar in many ways, but the key differences are:1.

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

And don’t sleep on local banks or credit unions—they sometimes offer flexible portfolio loans that could work for a deal like this.Since your wife qualifies as a first-time homebuyer, check out any state-specific programs or HUD options for down payment assistance.

Since FHA is not an option, i would advise that your seller needs to work on their credit score and savings to qualify for a conventional loan.

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?