Quote from @Brennen McConnell: Can you qualify based on the following USDA requirements?

Hi Most Qualified Intermediaries should be able to do it within a day or so. 

Make sure you’re working with a lender who has experience with 203(k) loans and a contractor who understands the program’s requirements.2.Loan Process Can Be Slow – Unlike a standard mortgage, the lender will be heavily involved in the renovation funds, which means more paperwork and potential delays.3.Strict Repair Guidelines – The work has to improve the home’s safety and livability, so luxury upgrades usually don’t qualify.4.Living Through Renovations – If you go with a Limited 203(k) (up to $35K in repairs), it’s usually manageable, but for a Standard 203(k), major work might require you to live elsewhere for a bit.It’s a solid strategy, just make sure you’re working with the right lender and contractor so things go smoothly.

.- No bonus depreciation: Unlike U.S. rentals, foreign properties do not qualify for bonus depreciation.

Would we need to put an additional 20% down on a commerical loan at that point to qualify, and what flexibility is there in establishing income minimums to even meet a criteria for commercial lending?

Buying a primary first will likely give you the best opportunity to qualify for free/cheap money like Down Payment Assistance, grants, and mortgage tax credits.

However, not every lot qualifies.

My wife qualifies as a Real Estate Professional (REP) in 2024, but she did not qualify as a REP last year, and our rental losses were passive in prior years.

Lenders typically look at your full tax return (Form 1040) with Schedule C (for self-employment income) or Schedule E (for rental income) to verify income.To qualify for a home loan, banks generally require:At least two years of reported self-employment income.Tax returns, bank statements, and possibly profit & loss statements.A solid debt-to-income (DTI) ratio to ensure you can handle mortgage payments.If you’re newly self-employed and don’t have two years of tax returns, you may need to look into bank statement loans, which some lenders offer based on income deposits instead of tax returns.

Option 3- If they have qualified for FHA; counter the offer to see if they can qualify for low downpayment conventional loan