6/22/23 – Can you use income from an ADU?

I had a deal come across my desk yesterday that was in escrow for 21 days, and the lender could not get the buyer qualified. The Agent called me thinking we could use ADU income, and she was right! The other lender swore up and down that they could not use the income from the ADU rented at $2800.00 per month, and guess what? HE WAS WRONG!!! We can use ADU income when sending the loan to Freddie Mac, not Fannie Mae. There are some rules like, it can’t be more than 30% of the total income to qualify, but it can be used! In this case, it was the difference between a BOM and a COE! I want to congratulate the Agent for not giving up and calling me! By the way, FHA also uses income from an ADU to help you qualify with some restrictions.

Real Estate Roadmap is next Thursday and 6/29 at 9:30-10 AM meet and greet, and the show starts at 10 AM. We are holding it at Valencia Country Club, and I am interviewing two top agents, Holly Thompson, and Tami Cicerello. Both are doing very well in a challenging market. Please let me know if you would like to attend. It should be fun and informative.

Interest rates got hammered today, and it will be choppy for the next few months while we figure out a direction. The direction we are hoping for is down, but who knows what will happen. In the meantime, prices are still rising. Will they ever stop?

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• Government Loans (FHA / VA) are in the high 5’s.
• Conventional Loans up to $726,200.00 are in the 6’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the 6’s
• Jumbo loans above $1,089,300 are in the 6’s
• 5/1, 7/1, 10/1 Arms are in the high 6’s.
• Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
• No income qualifier – 20% down with reserves! In the 8’s and 9’s!
• 0 down loans are in the mid to high 6’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 7.99% with limited fees – But they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until 2024!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am around all weekend if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!