Utilizing rental income from the previous home to qualify for the new mortgage in Kentucky FHA, VA, Fannie Mae

 Kentucky FHA, VA, and Fannie Mae Conventional Mortgage rules for rental income


Today's borrowers often wish to retain their existing homes when purchasing a new primary residence. Many questions arise about utilizing rental income from the previous home to qualify for the new mortgage. To clarify the guidelines, we've compiled the pertinent information below.

FHA

  • Must be relocating 100 Miles from departure home.  
  • Appraisal evidencing market rent and that borrower has 25% equity.  Does not need to be done by FHA appraiser.
  • Executed Lease agreement of at least one year’s duration after loan close.
  • Proof of receipt of security deposit or First Month’s Rent.
  • Mortgagee must deduct the PITI from the lesser of:
    • the monthly operating income reported on Fannie Mae Form 216/Freddie Mac Form 998; or
    • 75 percent of the lesser of:
      • fair market rent reported by the Appraiser; or
      • the rent reflected in the lease or other rental agreement.

Conventional

VA

  • Must provide either a fully executed lease agreement or CMA (Comparative Market Analysis) completed by a real estate agent.
  • Must use 75% of the lease agreement amount or 75% reported on the CMA.
  • Can only be used to offset PITIA



    Joel Lobb  Mortgage Loan Officer

    American Mortgage Solutions, Inc.
    10602 Timberwood Circle
    Louisville, KY 40223
    Company NMLS ID #1364

    Text/call: 502-905-3708

    email:     kentuckyloan@gmail.com

    http://www.mylouisvillekentuckymortgage.com/


    NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574

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