Hi, Is the qualification always based just on salary and fico of the borrower?
If the borrower is looking to buy an OO MFH, does the rent income of the other units help? Is it is excluded?
eg.
OO MFH, 3 units. buyer will live in 1 unit and rent at least 1 of the others.
income 60k fico 630
market rent = $700/ unit.
MFH price $195,000
does the borrower have enough income to qualify for the MFH? seems short to me (60k X 3) Personally, I am more comfortable with 2.5 x income.
Options?
Based on the numbers you provided the borrower would qualify one of two ways.
1-FHA will do this loan based on the information you provided without using the rental income to qualify. You could use the rental income as long as you had a rent schedule and operating income statement done as part of your appraisal. The lender will allow you to use 75% of the rental income towards qualifying.
2-ALT-A financing will also allow you to qualify for the property, but you could use the rental income as long as you had a rent schedule and operating income statement done as part of your appraisal. The lender will allow you to use 75% of the rental income towards qualifying.
What you have left out of your post is how much debt the borrower has and also how much money they have in the bank. For ALT-A financing you will most likely need two months PITI to qualify. FHA requires 3 months reserves. Hope this helps.