Q: I own a three-family home in Holyoke, Massachusetts, and would like to use it as a rental/income property and purchase a home in a more rural area. Can you help me find a lender who doesn’t see in only black and white? I spoke with a lender who said that they would not consider the rents from all three apartments because it wasn’t on my taxes as such. I tried to explain that I am living in one apartment and my mother in another, so the two apartments weren’t rented out. I have all three apartments rented out–$700, $700, and $850 per month covers ALL the mortgage, taxes and insurance, and leaves me with $950 income at the end of the month. I am so frusterated and any help on such a lender or your professional suggestions would be greatly appreciated!! Thank you.
A: With a conventional mortgage, the typical requirement is a 2-year history documenting rental income with an investment property via the Federal Tax Return. This condition can be avoided by applying for an FHA loan, which does not require a 2-year history for rental income. If you would like to discuss the requirements for on FHA loan, please contact us, and we would be happy to do so with you.