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Can future rental income be considered for mortgage income?

Im looking to buy a multi-family residence that has a stable history of renters. Would there be a way I could get this future income counted as well?
  • November 06 2013 - US
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Answers (5)

Best Answer

As Wayne stated 5+ units require commercial financing. If you're buying a 1-4 unit property, to determine the income we use to offset the PITI of the property you plan to purchase, we typically request the appraiser add a Operating Income Statement (Freddie form 998 or Fannie form 216).  Here's a link to Freddie's form:
http://www.freddiemac.com/sell/forms/pdf/998.pdf

  • November 06 2013
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Yes, you can use the current Rent Roll as income towards the mortgage payment. However, you didn't mention how many total units / whether you will occupy one / purchase price / down payment / credit score. More info needed to provide the best guidance.
  • November 06 2013
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I am from the mortgage side. At first mortgage as a direct lender and service 50% of our portfolio sometimes we can make exceptions.  i just closed a purchase of a non owner property where we allowed our client to use 75% of the rental income towards him qualifying.  The property was a Single Family.
These are case by case.
Please contact me so we can discuss further or if you have any questions.
thanks
Miichael
  • November 06 2013
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Fannie Mae and Freddie Mac only allow max of 4 unit properties to be financed under investment program. If you are talking about more than a 4 unit bldg. you would need to get a loan as commercial loan from a bank. If equity is high enough they may allow % of rental income to count.
If 2-4 units Fannie Mae/Freddie Mac will allow 75 % of rental income to count if 30 % or greater equity in property.
  • November 06 2013
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  Under the rules established by Fannie Mae and Freddie Mac after the financial crisis, rental income can be included in qualifying income only as documented in the owner's tax return for at least one year. That means that rental income cannot help you qualify for the mortgage used to purchase the house that will generate the income.
  • November 06 2013
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