Q&A – November 25, 2017

FHA – Second Appraisal Requirements – Flipped Properties: Is a 2nd appraisal required between 91-120 days after a flip when the price is 100% higher than the previous owner’s acquisition cost? [MC Comparison Chart-All Agencies Property Flipping]

Answer: Property flipping rules vary by agency. If you have flippers as clients, call me before they list the home for sale! Yes. You can check out the information on “All Agencies-Property Flipping Chart” which we have attached below. Please see the full guidelines below. Reference: 4000.1, II, A, 1, b, iv, (A) (3) Restrictions on [...]

2018-09-25T19:40:08-05:00December 28th, 2017|

FHA – 2-Unit-Rental Income: Can the borrower use the rental income for the non-owner occupied unit to qualify for the purchase, if the unit is currently not under lease?

Answer: Yes. The rental income for the other unit can be used for qualifying. See the highlighted portion of the guideline below to see how it’s calculated. Reference: (I) Rental Income (TOTAL) (1) Definition: Rental Income refers to income received or to be received from the subject Property or other real estate holdings. (2) Rental Income Received from [...]

2017-12-28T11:48:15-05:00December 28th, 2017|

FHA – Using Rental Income on Departing Residence: What are the guidelines and documentation requirements for using new rental income from a departing residence in order to qualify for the new home?

Answer: FHA has guidelines to allow a borrower to use departing residence income to qualify for a new home. Call me 1st-Details Involved! The information you need is located in the FHA 4000.1 Handbook and is highlighted below. Reference: 4000.1, II, A, 4, c, xii, (I) (3) Rental Income from Other Real Estate Holdings (TOTAL) [...]

2017-12-28T11:47:04-05:00December 28th, 2017|

Freddie Mac – Multi-Unit – Home Possible: Is a “notice to vacate” letter required when a borrower is purchasing a 2-unit Home Possible home, and both units are rented month-to-month?

Answer: Even though the borrower is required to occupy one of the units in order to qualify for the Home Possible program, this is not a Freddie or a Fannie rule. However, a lender may ask for something like this if they suspect that your borrower is not really going to occupy either unit and [...]

2017-12-28T11:45:39-05:00December 28th, 2017|

Fannie Mae – Second Home Requirements: Can a property be classified as a second home if rented 355 days and used for personal use for 10 days per year?

Answer: Fannie Mae allows this, as long as no rental income is used from this property when qualifying the borrower, and your borrower meets the other requirements from the FNMA Selling below. However, it is important to note that some lenders will not allow this even though FNMA does, so check with your lender as [...]

2017-12-28T11:44:37-05:00December 28th, 2017|