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How important is verification of rent?

I am getting a FHA loan on a house I'm putting down 10%. I can't get a traditional because I have limited credit because I am young and have only had credit cards for 2 yrs. I pay cash for rent and I get receipts but my underwiter said it wasn't sufficient and I need to send in bank statements. But on my bank statements it doesn't always show that I take out the exact rent amount at once because sometimes me and my roommate split it. I can show 3 other bills I pay on time each month. Will I more than likely get denied now ? by Foremama272 from , California. Aug 14th 2015 Reply


Greg Filzen (gfilzen@mtgcapital.com)
#165 ranked lender in California - 20 contributions

There are two parts to your question. First of all, you may qualify for a "traditional" which means Fannie or Freddie backed loan. Just because you have only had credit card type credit for 2 years or less does not disqualify you for a Fannie/Freddie loan. Some of our investors also allow for non-traditional credit such as car insurance, phone bill, utility bill to qualify. But since you are going FHA, sometimes a "Verification of Rent" is not required by an FHA underwriter. In this case since your lender's FHA underwriter is asking for it, there are two acceptable methods 1) Canceled checks or bank statements which you don't have OR 2) A professional leasing agent VOR (Verification of Rent) form completed by the landlord or landlord's agent stating your rent payment history. Usually a private party is not allowed to complete the VOR form. If you cannot complete your loan approval, please contact me as I believe all avenues have not been explored and we would likely be able to help you get approved. Good luck. Greg Filzen, Sr. Loan Officer, Bluestone Capital, 310-619-4700

Aug 14th 2015
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Hans Bruhner (Hans Bruhner)
#97 ranked lender in California - 101 contributions

FHA loans do not usually require a verification of rent. It is at the underwriters discretion. If you are putting down 10% it sounds like you should be OK without it but again, it is up to the individual loan officer. If you have an issue, I am happy to help at www.HansLoans.com or (866) 385-1650 and I am in California also.

Aug 14th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,109 contributions

Usually the only reason you would need to get a verification of rent (VOR) would be if you were having to go manual underwriting. Sometimes the underwriter will accept 3 to 6 months of reserves in lieu of cancelled checks. You need to talk with your current loan officer and go over all of this with him/her to see if there are any other options available. If it is only due to needing meet alternative trade line requirements you may be able to replace the VOR with a 4th 12 month pay history on something else? Best wishes, Sean

Aug 16th 2015
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,045 contributions

FHA requires 10% down if your credit score is below 580. If this is your scenario, then the it's possible your loan will be denied if you cannot show a 12 month payment history.. Understand that the lower the credit score, the more strict the guidelines.. And as others have stated,, they will not take a Verification of Rent directly from your landlord.. If however you pay a property management company, then a letter from them will work.. If your credit scores are good to excellent, then there are better options other than FHA, and it's possible you wont need the verification of rent.. It's best to discuss this with your loan officer.. Understand that he is not your enemy.. he's doing everything he can to make your loan go through.. if the VOR wont work, then let him do his job and figure a way to make it work.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Aug 17th 2015
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,228 contributions

WIth 10% down, I'd press the lender why you don't qualify for a conventional loan. Many underwriters ask for rent verification if you don't have enough established credit (at least 2 accounts open for 12 months or longer). Unless your scores are too low or there are other reasons that make conventional not a good option, that should be a better option for you. FYI, a FHA appraisal can be used for a conventional loan. FHA is usually a bit more flexible but if you qualify there are conventional options that can also be more flexible for first time buyers who meet certain requirements, but some lenders are not very familiar with those options and push those customers into FHA loans. Good luck!

Aug 17th 2015
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