Can I Purchase with FHA or VA with a Rental Property

Got a call today with a very good question:

Question: "Can a buyer purchase a home after relocating with a short sale on previous home?"

Answer: "No - they can't purchase until 2 years pass and no other delinquencies happen on credit HOWEVER they should have......." See below:

SOLUTION - FHA & VA will allow current homeowner's to utilize rental income to offset mortgage if they are relocating. FHA & VA also waive the requirement of having to demonstrate 75% equity in current home to offset current mortgage.

SUMMARY: If you are working with anyone relocating from another area (has to be a significant distance to qualify for relocation) and owns a home they can't sell, they can rent existing property and may qualify for a new FHA/VA loan. The rental vacancy for this area is 15% (85% of total rental income can be used to offset mortgage per FHA guides). Must have signed lease and we may have to verify that deposit check or 1^st month's rent check has cleared.

Call me with any questions, or email any scenario you wish to discuss,

Thomas Merical