Owning a rental and effect on second home purchase

[Ren]

That wouldn’t make sense, because then no one could own more than a few rental properties without a massive income, or without being wealthy already and paying cash for them all. And leveraging is kind of the point – 20% down on multiple properties will get you a lot better return than paying cash for one.

[(former)FormerSanDiegan]

Isn’t part of the new legislation that rental income can no longer be used as income to qualify for a loan.

In other words, you have to basically qualify for both loans you’re carrying w/o counting rental income…or was I misinformed?

You were mis-informed. The new law did not change these rules. However, new Fannie Mae conforming loan guidelines have been put in place, effective August 1. These restrict how converting your current residence to a rental impacts a loan on a new personal residence. They also may impact the ability to refinance when owning a principal residence and a rental.

IN short, you can count 75% of the rental income as income as long as you have 30% equity. Otherwise you count 0% of the rent.

Impact outlined here :
http://thegreatloanblog.blogspot.com/2008/08/huge-impact-on-2nd-homes-and-investment.html

And Additional Fannie Mae details here:
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf

[(former)FormerSanDiegan]

Isn’t part of the new legislation that rental income can no longer be used as income to qualify for a loan.

In other words, you have to basically qualify for both loans you’re carrying w/o counting rental income…or was I misinformed?

You were mis-informed. The new law did not change these rules. However, new Fannie Mae conforming loan guidelines have been put in place, effective August 1. These restrict how converting your current residence to a rental impacts a loan on a new personal residence. They also may impact the ability to refinance when owning a principal residence and a rental.

IN short, you can count 75% of the rental income as income as long as you have 30% equity. Otherwise you count 0% of the rent.

Impact outlined here :
http://thegreatloanblog.blogspot.com/2008/08/huge-impact-on-2nd-homes-and-investment.html

And Additional Fannie Mae details here:
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf

[(former)FormerSanDiegan]

Isn’t part of the new legislation that rental income can no longer be used as income to qualify for a loan.

In other words, you have to basically qualify for both loans you’re carrying w/o counting rental income…or was I misinformed?

You were mis-informed. The new law did not change these rules. However, new Fannie Mae conforming loan guidelines have been put in place, effective August 1. These restrict how converting your current residence to a rental impacts a loan on a new personal residence. They also may impact the ability to refinance when owning a principal residence and a rental.

IN short, you can count 75% of the rental income as income as long as you have 30% equity. Otherwise you count 0% of the rent.

Impact outlined here :
http://thegreatloanblog.blogspot.com/2008/08/huge-impact-on-2nd-homes-and-investment.html

And Additional Fannie Mae details here:
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf

[(former)FormerSanDiegan]

Isn’t part of the new legislation that rental income can no longer be used as income to qualify for a loan.

In other words, you have to basically qualify for both loans you’re carrying w/o counting rental income…or was I misinformed?

You were mis-informed. The new law did not change these rules. However, new Fannie Mae conforming loan guidelines have been put in place, effective August 1. These restrict how converting your current residence to a rental impacts a loan on a new personal residence. They also may impact the ability to refinance when owning a principal residence and a rental.

IN short, you can count 75% of the rental income as income as long as you have 30% equity. Otherwise you count 0% of the rent.

Impact outlined here :
http://thegreatloanblog.blogspot.com/2008/08/huge-impact-on-2nd-homes-and-investment.html

And Additional Fannie Mae details here:
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf

[(former)FormerSanDiegan]

Isn’t part of the new legislation that rental income can no longer be used as income to qualify for a loan.

In other words, you have to basically qualify for both loans you’re carrying w/o counting rental income…or was I misinformed?

You were mis-informed. The new law did not change these rules. However, new Fannie Mae conforming loan guidelines have been put in place, effective August 1. These restrict how converting your current residence to a rental impacts a loan on a new personal residence. They also may impact the ability to refinance when owning a principal residence and a rental.

IN short, you can count 75% of the rental income as income as long as you have 30% equity. Otherwise you count 0% of the rent.

Impact outlined here :
http://thegreatloanblog.blogspot.com/2008/08/huge-impact-on-2nd-homes-and-investment.html

And Additional Fannie Mae details here:
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf

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