Expert: Lisa Webber - 9/29/2009

Question
Hi,
We are planning on renting our home to a couple with a rent to buy lease. We want to move up to the DC?VA?MD area and buy a home. We have good credit, but no down payment and the home we are renting (renting b/c we cannot seem to sell it). My question is, how badly does having this rental property affect our getting a loan? Is it a huge hindrance, even if we have a rent to own lease agreement with them? If so, is there anything we can add to the lease agreement that will help our situation?

Thank you for any info you can get.

Diana

Answer
It may not be a problem at all.  I just worked with a family in the same situation and he had a VA benefit available to him so he did not need a downpayment.  They had a home in Florida that they were unable to sell for what they owe, and in order for them to qualify, all they needed was a one-year lease on the home in Florida.  It all depends on your particular situation as far as your income and debts.  What you'll want to do is talk with a local lender who can run your numbers and credit and let you know how much you would be qualified for.  If you or your husband is former military, you might qualify for a VA loan which does not require a downpayment other than the earnest money check when you write up the offer.  If you'd like a recommendation for a good lender, just let me know!