I know it really depends on the lender but I am talking in general for fannie mae basic requirements.

And since I don't understand where the 120K debt is coming from I assume it's on the rental which means it's probably in the red after interest and depreciation so it's actually hurting your income.You could get the rental debt off personal and into a LLC but it would take time and fees and only result in higher interest rates but you could use the target property's income.Your credit score is excellent and Fannie Mae recently changed student loan rules last year to take lower income based payments as opposed to FHA's 1% rule if it turns out the 15K is hurting your DTI.The last option is to sell the rental show the gain as income and combine that with a W-2 for 2018, pay down more debt and wait to 2019 to try again with more income and less debt.

If you're talking about a single family home then you're going to have to use a conventional bank who will use Fannie Mae rules which means you must have sufficient w2 income.The only way we have been able to get around this is by buying 4 properties and then doing a commercial loan on those 4 properties.

It's a Fannie Mae foreclosure.  

He said I can either get a HELOC on my primary, get conventional Fannie Mae Homepath loan which is 3% down for new property or look into first lien HELOC (very complicated loan).

The last bank (US Bank) I spoke with insisted that they are putting me in the commercial loan category and that it is still a residential loan, but because it is 3 units Fannie Mae requires 25% down. 

Homepath is a program that allows you to buy Fannie Mae owned properties or essentially their foreclosures.

Fannie Mae asks this on many occasions as well.

I have 4 investment and one primary - I believe that is the limit before you get to the stricter Fannie Mae 5-10 guidelines.hope this helps,Chris

Though I'm no longer wired in directly to the leveraged purchase element of the buyer market, it seems to me that a huge faction of OO buyers these days are again finding support from the dubious benefactors we know as Fannie Mae and Freddie Mac.