Using Rental Income for Loan Qualifying

I have a rental property, can I use the income to qualify for a loan?

Below are general rules of thumb.

 Previous 2 years tax returns showing rental income/loss.  All schedules and pages.
Depreciation may be added back into income and the positive income is to be added to the borrowers income. Loss is added as a debt.

• Properties recently purchased may not show on the tax return and current leases* must be obtained from the Borrower to verify current income being received. The income from the lease must be reduced by a 25% vacancy factor before calculating final income to be used.
• Proof of rents received by canceled checks or banks statements.

If the tenant is a family member, a copy of the lease and evidence of receipt of the rental income for twelve months or period of the lease, if less than 12 months, is required. On a brand new lease, the evidence of the receipt of the initial deposit is required. If documentation cannot be provided, no rental income may be considered.

*VA & FHA loans require a minimum 12 month lease.  Conventional loans generally allow a month to month lease.