I have a partner looking for financing for 3 condos. 2 are rented already and renters will be staying in place. She already has 1 mortgage (her home that she lives in) on her credit and has a credit score around 680. With the subprime conditions of today is there anyone out there who can get her 100% financing for these? What’s the best situation with the least out of pocket that she can get?
She wouldnt be a subprime borrower. However, the conforming market has had some changes to their Alt-A (portolio) loans as well.
With a 680 she’d have to be able to qualify full doc. This means that she’d have to have enough assets to cover 6 months of reserves for each of the properties she’s submitting. (if all at 1 time). 720 needed for reduced documentation loans.
She’ll have a better chance qualifying at 90-95% financing depeding on how much in liquid assets she has available for down payment, closing costs, prepaids, and reserves.
She should be speaking with a nationwide mortgage consultant that specializes in investment loans such as these.
As Ben said she will have to go full doc. However she will be able to use 75% of the operating income from the property towards qualifying for the loan. This goes a long way towards helping with qualifying. Also, since these will most likely be 100% LTV No MI loans she will not have to worry about negative operating income killing the deal.
do any of these condos have equity in them. If you have the right broker and closing agent, you can ask the seller to hold a 5-10% 2nd which can be used as the downpayment on a loan allowing 100% CLTV.