I'm sorry you're not receiving accurate information. I see a couple posters know the correct guidelines though.
You need 25% equity in your departure residence to use your rental income to "offset" the mortgage payment on your current home. If you don't have enough equity, you'll have to qualify for both mortgage payments simultaneously. To acquire the new home, you can use a 203K to buy it and your minimum investment as of January 1st is 3.5%. You don't need any reserves to buy a single family with a 203K but having reserves will help you get an automated approval.
You can use a 203K to do a complete gut job for your property (the foundation must stay in tact!). I have a client who just purchase a 35k home and is doing 75k in renovations to it. He's tearing it down to the frame and rebuilding.
Also, I'm a Local Renovation Specialist (My focus is on rehab lending) with Wells Fargo, my suggestion is for you to come by my office to speak with me (if you're still in the process). This is a complex program and you're going to want someone who specializes in this type of financing.
I've wrote numerous posts on Renovation Financing and have done many loans for Trulia users. Please read some of these past posts I've made.
Here's my contact info. If you decide to come by the office (we have free parking in downtown!), please call ahead of time as I may be out at an appointment.
511 W North Ave
Chicago, IL 60611
847.404.7006 - cell
Vice President of Mortgage Lending
203k Rehabilitation Loan Specialist
P: (312) 379-3529
C: (312) 399-3191
F: (773) 516-6026 email@example.com
320 W. Ohio St Ste 410 â€¢ Chicago, IL â€¢ 60654
NMLS ID 2611 | NMLS Consumer Access
Licensing Information: https://www.guaranteedrate.com/licensing
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
Those who try to time hitting the bottom will only realize it when they miss it.
Happy house hunting!
If you need help with guidelines and questions about the 203k loan please go to http://www.203kloanillinois.com. There is a lot of good information there.
David P Cruickshank
Ardain Mortgage Corp.
As a rule of thumb, If you have questions about financing, seek the person who's job is to provide the financing. =)
HUD 203(k) consultant
My mortgage lender is actually doing a deal for me right now using the 203K program. My client told me that she had called a number of other lenders and noone would do the loan. Email Steve Bloom with A and N Mortgage at firstname.lastname@example.org. and he should be able to help you out.
that the home they presently own will be rented have affected new lending policies at least for
time being. Many homeowners were claiming they were going to rent out their home then
would actual let their home fall into foreclosure, adding to our economic crisis. The last
FHA guidline in order for you to use rental income to contribute to you obtaining financing is
that you must have at least 25% of equity in your present home and if going conventional
that requirement is 30%.
We are in changing market try to keep updated with your local lender.
Wells Fargo Home Mortgage
Are you working with a Buyer's agent?
One of my responsibilites when establishing a realtionship with a buyer is ensure that they have financing for their purchase. We work with Wells Fargo and they have a guarantee to close once you are given the loan committment. Last week Wells Fargo named the Chicago area a stable area so they are doing 95% LTV and FHA loans.
Please contact me on my profile so that I can assist you in your successful purchase.
Rubloff Residential Properties
I would recommend you work with a trusted lender and they can give you an updated status on the current FHA loan rules. It is difficult to keep up with all the changes taking place and will continue until this market gets back on track.