A borrower has rental income from a property that was their former primary residence. They moved out 8 months ago and have been renting it for 6 months. The rental income can be used if:
Correct Answer
D) The borrower provides 2-6 months of PITIA reserves for the property
When rental income is from a recently converted primary residence without established rental history, lenders typically require additional reserves (2-6 months of PITIA) to mitigate the risk of vacancy or rental income interruption.
Why This Is the Correct Answer
When rental income is from a recently converted primary residence without established rental history, lenders typically require additional reserves (2-6 months of PITIA) to mitigate the risk of vacancy or rental income interruption.
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