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But if you're your counting on rent from your friends to pay the mortgage, you're no longer a residential homebuyer, you're buying an investment property and ty
by Johnny555 8y ago
But if you're your counting on rent from your friends to pay the mortgage, you're no longer a residential homebuyer, you're buying an investment property and typically higher standards apply.
So realistically, the only way you could buy a house and rent to your friends is if you can qualify to buy the house on your own.
- ensignavenger 8y agoDTI ratios are usually pretty generous, but if you can't qualify without the rental income, you may need to buy a 2-4 unit building and rent the other units to friends. This can be done with an FHA insured loan. It may be possible to count rental income on a 1 unit property under some programs, I am not fmailiar with all the rules. I don't think you can with an FHA loan, though.
- ThrustVectoring 8y agoAFAIK the rental amounts count for 75 cents on the dollar against the mortgage total, and you need to either have experience being a landlord or have a signed letter of intent to show the underwriter.
- ThrustVectoring 8y agoWhat? That's not how the qualification works. If it's no bigger than a 4-unit building and is going to be your primary residence, you can still qualify for a FHA loan at 3.5% down.
- Johnny555 8y agoMy bank required proof of income sufficient to qualify for the mortgage -- presumably if part of that proof was "4 of my friends promised to pay me $1000/month each to rent a room in the house", that would no longer qualify for a regular homeowner mortgage program.