Why Strategy Matters More Than Loan Type

Whether you use an FHA or conventional loan, the key question is this:
How do we structure your financing so you qualify for your next home and hold onto your first one as a rental?

Here’s what most buyers don’t realize:
✔️ You can keep your current home
✔️ You can turn it into a rental
✔️ You can use a low-down-payment loan again
But… only if your financing is structured the right way.

What to Know About Using Rental Income to Qualify
Let’s say you want to rent out your current home and use that rental income to help you qualify for your next purchase.

Here’s what it takes, depending on the loan type:

✔️ With FHA:
You’ll need to meet ALL of these conditions:

At least 25% equity in the current home (verified by appraisal or AVM)

A signed 12-month lease

Proof you’ve collected security deposit + first month’s rent

If you’re missing any of those? FHA won’t count the rental income. You’ll have to qualify carrying both mortgage payments.

✔️ With Conventional:
The rules are a bit more flexible, especially if:

You have a signed lease agreement

You show evidence of tenant funds received (in most cases)

Your income and reserves meet certain thresholds

Plus, conventional allows you to use rental income sooner in the process—making it easier to qualify while carrying two properties.

What’s Right for You?

This is where we move from guidelines to game plan.

Do you have enough equity in your current home to meet FHA’s rule?

Do you need to count rental income to qualify—or can you carry both mortgages?

Are you trying to minimize the down payment on your next home?

Do you want flexibility for future investment moves?

The best path forward depends on how all these pieces fit together.

What We Do Together

When clients come to me with this scenario, we do three things:

Run the numbers both ways (FHA and conventional)

Evaluate the rental strategy—is the lease solid? Is the property ready?

Structure the deal to give you flexibility, keep reserves in place, and set you up for long-term growth

This isn’t just about getting approved. It’s about building the foundation for your real estate portfolio—starting with a smart first move.

Let’s make sure your first step into real estate investing is done with clarity, confidence, and long-term success in mind. Before you assume which loan is right, let’s talk strategy. I’ll help you weigh the options and structure your move like a true investor.

Chenine Lozano
Mortgage Broker
W: (562) 620-7662
C: (562) 762-7511
NMLS #1655101
DRE#02069548
Endeavor Mortgage NMLS 355050