My wife and I are in the process of setting up a business entity for the purpose of purchasing ugly apartment buildings in the 3-4 family ranges, rehabbing them and providing low income housing. However, I have marginal credit and she has pretty good credit, good enough to get loans. My question is where is the cutoff where lenders will look at only one owner’s credit? For instance, I have heard that most places will not need to pull the credit of owners who have under a 20% ownership of the business. I am trying to find out which is the best way to set up the owners’%, so that my credit will not kill loans, until I can get my credit cleaned up (currently, in process – thanks creditboardsdotcom). Can anyone verify the 20% statement? Basically, I am trying to find a way to have a business partnership which is based solely off of her credit. Right now I am considering a 90/10 ownership with her owning 90%.
If you deal with a subprime lender they will use the primary wage earners credit score.
If you are going to a prime lender they will use the lower of the two.
Is your income required to hit the DTI #'s.