What is allowable income and what is our lenders position on rent spikes year-to-year?
A. Our partners model is to underwrite only “in-place” income. Only rents from either commercial or residential leases already in place are to be counted, period. If a borrower has signed leases, but tenants who have not yet moved in and paid rent,this income they are moving in tomorrow or if they have moved in and not paid rent. No exceptions won’t count even if will be made; exceptions would be a serious violation of our lenders underwriting policy. Rents that show significant spikes year after year must be validated by other means in addition to the appraisal indication of market rent, rent roll, and borrower letter of explanation. These means may include, but aren’t limited to, 4-6 months of bank statements, cancelled rents, and (if need be) tenant estoppels. If big increases in rents are validated by rent roll, market, and other means, but cannot be reasonably explained by increase in leasing, down units for renovation, increased rent, etc., underwriters use their discretion, incl
