Hey, Kyle here with WinTheHouseYouLove.com.
In this video, I'm gonna show you how you can use your positive rental
history, so your on time rental payments to count towards an FHA loan approval
to help get you into a home easier because unfortunately, your credit score
and credit history does not include your rental history most of the time,
unless your landlord isn't reporting that or you're using some service and
your credit score is one of the biggest factors in getting approved for a loan.
Okay, so here is how it works.
So positive rental history counts towards your approval.
Chances of getting an FHA loan, and the way that this works is
FHA loans, no matter what lender you'd use, use a software called Total.
That doesn't really matter the name of it, but basically it's an underwriting
software where they're going to take your application, run it through the
application, and it's going to give you kind of a thumbs up or a thumbs down
on if your loan is approved or not.
So for people who initially got a thumbs down, adding on positive a rental history
can help turn that into a thumbs up.
Now this obviously depends on tons of different factors
that FHA doesn't disclose.
But if you're at that point, if you're talking with a loan officer and you
aren't able to get approved with an FHA loan, talk with them about exploring
this option to see if you can use your rental history for the past 12
months to flip that no into a yes.
So you will need a 620 minimum FICO credit score.
Okay.
One little side note as well is if you do have late rental payments, just
let your loan officer to not include your rental history in here, okay?
So it's not going to count against you.
If your loan officer asks you about your rental history and you have
late payments on your rental history or you paid it late, that's okay.
It don't include it and it won't count against you if you disclose that, okay?
The only thing this can do is help.
It cannot hurt you.
So to use this, again, 620 minimum credit score, also at
least one borrower on the loan.
It has to be a first time home buyer.
That means you haven't been on title to a home in the past three years.
Also, you need 12 months of on time payment history.
The way this is documented is you need a rental agreement or a lease agreement,
and one of the following, either a written verification of rent from a landlord, it
can't be a business, or a family that you know that you're related to or you own.
Twelve months it canceled rent checks, 12 months of bank statements
or payment service statements.
So in here, we're expecting things like Venmo, or Cash app if you're paying
rent through those ways or Zelle to be included in those, or a landlord reference
from a rental management company.
Okay?
If you are renting from family member, checks or bank statements
are your only options here, okay?
And if you wanna go through this process, and look at getting approved for a loan
with your rental history with an FHA loan, or you just wanna explore other
loans, reach out to me and my team.
We would love to help you.
We're licensed in all 50 states.
You can start an application.
It's very quick, and then we can give you quotes and walk you through your options.
You can just go to WinTheHouseYouLove.com and click on get pre-approved.
Okay, so here's the main benefit of this.
This kind of nudges the approval in the right direction.
Again, this is not going to hurt you.
There's no negative impact if you don't have on time rental history, or if you
can't document it in any of the ways on the previous slide, that's okay.
The only thing this is going to do is if it's, if you're initial approval,
well, I guess it's not approval.
If the initial answer from the underwriting software was that your
loan isn't approved, adding rental history could help flip that into an
approval given the extra boost that your application needs to get an approval.
Also, it's a more full indication of your ability to repay a
loan than just a credit score.
It's amazing that like credit scores are so, important in getting a loan, but your
rental history normally isn't included.
So this is kind of FHAs the next step in helping that rental history
to actually impact you're payment cuz you're, you've been making.
You know, I hear this all the time from people, they're like, I'm gonna
go buy a home that's $2,000 a month.
I've already been paying, you know, $2,500 a month in rent for the past five years.
So how is it difficult for me to get approved for a loan in this way?
So this is what's really helpful here.
One quick side note here.
FHA loans, a lot of people kind of get this confused with the credit score.
If you have anywhere between a 500 to a 579 credit score, you will need 10% down.
Okay?
You can still get approved for a loan with a 500 credit score
and 10% down on an FHA loan.
Feel free to reach out to us and we'd love to help.
If you have a 580 plus credit score, you will need 3.5% as a
down payment, and of course, with this program to use your rental.
For that approval, you will need a 620, okay?
This is only part of the picture.
To learn more about FHA loans, watch this video here where
I cover all of the details.