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FHA Maximum LTV – Identity of Interest Transaction – No Lease With Landlord
Question:
The borrower has been living in the home for almost 2 years. She does not have a lease, but all bank statements, driver’s license, pay stubs, and W-2s have the home address. She also has a renter’s policy on the home she has rented since January 2024. Would this be sufficient to do maximum financing?
Answer:
HA allows for “a lease or other written evidence to verify occupancy” (see guideline below). What you are describing sounds like acceptable documentation for occupancy.
Reference:
FHA Handbook – 4000.1, II, A, 2, b, ii
(A) LTV Limitations Based on Identities of Interest
(d) Tenant Purchase – The 85 percent LTV restriction may be exceeded if the current tenant purchases the Property where the tenant has rented the Property for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.
MortageGuidelines.com Resource:
MortgageGuidelines.com offers an All-Agency Comparison Chart for Identity of Interest – Arms Length Transactions, accessible under “Guideline References” in the “All Agency” category.