Use Rental Income to Qualify for a Home Loan – Boston Mortgage

A common question when a buyer’s trying to buy a condo or single family home is can I use the rent from other bedrooms to qualify? Income from a primary residence or second home is called Boarder Income which is normally not acceptable. When can use the income?

If you are a borrower with disabilities and receive rental income from a live-in personal assistant, the rental payments can be considered as an acceptable income in the amount of 30% of the total gross income that is used to qualify the borrower for the mortgage loan. This means if the mortgage payment is a $1000, the maximum the rental income can be used to qualify would be $300 and the reason is if you exceed 30% of the debt obligation, the property is considered an investment.

Personal assistants typically are paid by medical waiver funds and include room and board from which rental payments are made to the borrower. To verify boarder income your lender will request documentation of the boarder’s history of shared residencies such as a copy of driver’s license, bills, bank statements, W-2 forms that show the boarder’s address as being the same as the borrowers address. The lender will also request documentation of the border’s rental payments for the last twelve months which usually will be twelve months of cancelled checks.

Phil Ganz (354 Posts)

Philip D. Ganz is a Boston Mortgage Broker and Boston Home Loan specialist. For information, expertise, consulting, or advice about home loans, refinancing mortgages, or commercial property loans, contact Phil with no obligation: 617-529-9317

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