If I plan to rent out two rooms in the home can I use the potential rent income toward my income to qualify?

Asked by Jennifer Gottfried, Rocklin, CA Thu Apr 3, 2014

When you buy a duplex, you can use the potential rental income to qualify for the purchase. Can I do the same if I plan to rent out two bedrooms in the home? If not, how can I qualify for buying this larger home?

Help the community by answering this question:

+ web reference
Web reference:

Answers

5
RonS’s answer
RonS, , Concord, CA
Tue Apr 8, 2014
some lenders will allow "Boarder" income however, you would have to claim that income on your taxes and would have to have a two year history of the income and, would only get 75% credit towards the income...if they let you use the income. (Each lender may have different overlays beyond the fannie/freddie guidelines so, you'll hear variances. one year here, two years there, etc..)

So, if you aren't currently renting to anyone, and for two years and claiming the income on your taxes, no. They won't let you use it.

Your example of what it is you can do with a duplex isn't the same as what it is you state you are planning to do so, it's not really an apples to apples comparison.
0 votes
Sanjeev Ahuja, Mortgage Broker Or Lender, Floral Park, NY
Sat Apr 5, 2014
Lenders will not allow use of potential rental income from a owner occupied single family home. However, depending upon how much down payment you are making and what your current rent is or if you live with family, rent free, you may still be able to buy this house as an investment and use the market rent from it to get additional income to qualify.
Speak to a local licensed mortgage professional about this.
Good Luck!
0 votes
Alexander Gr…, Agent, San Jose, CA
Fri Apr 4, 2014
No. Room rent does not count as rental income. Just send me an email if you have any further questions.

Alex Greer
Loan Officer
NMLS #1056079

http://www.TheMortgageOutlet.com
408-352-5147
AGreer@TheMortgageOutlet.com
0 votes
John Ray Diaz, Agent, Elk Grove, CA
Fri Apr 4, 2014
Jennifer
I would be glad to have one of my lending contacts go over all your options. There have been some changes in avaliable loans.
0 votes
Suzanne MacD…, Agent, Morristown, NJ
Fri Apr 4, 2014
Probably not. First of all, it would need to be a multi-family home as I understand the rules. Renting out rooms to roommates in your single family home is allowed, but it will not count toward income. Second of all, in most cases a two year history of rental income is required before it counts toward your income in order to qualify for a mortgage. 358
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more