This brings up a few things:- 1) dodd frank potential and legal issue (just had a webinar with clint coons, an attorney about this) if a part of the rent goes towards principal reduction it can be "deemed," but not necessarily construed as seller provided financing2) from the end of conventional financing yes how fannie views this is that portion that is determined to be above market rent is or can be considered as the "leasee's funds," or borrowers funds as its viewed as principal contribution.

If you are an experienced investor that knows how do deal with these issues, you can always take it out on a price reduction.  

Even the Mortgage comes into play. when you take out a 30 year fixed rate $1 Million mortgage that disappears in 30 years, you make $1 Million / 30 years = $33,333 per year in the Mortgage reduction.

@Yeng Hawj Just be sure to note that it is for principal reduction on your check or bill pay.  

For repeat customers, I always give them a rate reduction and will sometimes send them a bottle of wine or something, but for the most part we keep it simple.

Because no time frame was introduced I look the liberty and said that 10k principle had been paid on the 130k principle of the loan leaving 120k principle left to be paid off.Now if you are just jumping from purchase/rehab to the next one then (within months) you won't see really any reduction in the principle becuase you haven't made that many mortgage payments, not to mentioned that the bank probably won't count the coming income from the rental for at least the first if not first two years the rental is cashflowing cutting the buying power you as an individual has.

If I have tenants living totally paycheck to paycheck then that reduces my chances of a paying tenant when things go south with any individual aspect of their financial lives (car breaks, job loss, reduction in hours, etc.)I own over 100 units and because of this mindset we only had one tenant with problems paying during COVID and because we look for qualified tenants we were able to be flexible with them to get caught up because the rest of the portfolio was supporting the bills. 

The recent (and occasionally giant) PVA increases undoubtedly made a rate reduction possible.  

If you don't like it, you could negotiate repairs and perhaps a reduction of the increase.

Offer $100,000 with 20% EMD results in a $20k down payment and reduction of offer to be financed at $80k.In short, my contracts once signed, where followed with my EMD within 24 hours of signing.