Video Transcript:
Investors see an unpermitted unit and think extra rent. But lenders see a building that officially doesn't exist, creating a huge, immediate problem for you. Lenders follow a simple formula here. I’m David Ghazaryan, and my job is navigating it. The illegal rent is excluded, so your loan calculation will always fail. Here is how the lender calculates. They take your legal rent, not your total rent. If the number is below the mortgage payment, you are denied. The only smart move is making the unit legal before applying. This step increases the property's official value and lets us use all the rental income. Beyond just the loan, your personal risk is very high. If a fire starts there, your insurance company can refuse to pay you for anything. This rule is a very important part of our financing process. For a deeper look, see my social platforms. Links and the article are in the description.
Read Blog Here: https://www.iqratemortgages.com/blog/unpermitted-adu-rent-for-a-reno-dscr-loan-does-it-count
