Calculators
Run the numbers before you call anyone.
Five quick calculators that go with the guides in The Library. Each one shows the rule it uses and links to the official source.
Rental loss allowance
How much of a rental loss can offset your salary or business income under the $25,000 special allowance, at your income.
Rule: the allowance is reduced by 50% of modified adjusted gross income over $100,000 ($50,000 if married filing separately and living apart). Real estate professionals and short-term rentals follow different rules. Source: IRS Publication 925.
Lender reserves
The cash reserves Fannie Mae’s automated underwriting looks for, measured in months of the full payment, plus a share of the balances on your other financed properties.
Rule: six months of the payment for an investment property or a 2 to 4 unit home you live in, two months for a second home, none for a 1 unit home you live in. For an investment property or second home, add 2% of the other balances with 1 to 4 financed properties, 4% with 5 or 6, 6% with 7 to 10. Your lender may require more. Source: Fannie Mae Selling Guide, Minimum Reserve Requirements.
SBA 504 down payment
How a typical 504 project for the building your business runs in is split between the bank, the CDC and you.
Rule: bank about 50%, CDC up to 40%, you at least 10%. Your share rises to 15% for a business two years old or less or a limited or single purpose building, and to 20% if both apply. Your business must occupy at least 51% of an existing building or 60% of new construction. Sources: SBA, 504 loans; 13 CFR 120.
Short-term rental tests
Two checks in one: whether your average guest stay keeps the property out of the passive rental category, and how your own hours compare with the common material participation tests.
Rules: an average stay of 7 days or less means the activity is not a rental activity under the passive rules. Material participation tests shown here: more than 500 hours, or more than 100 hours and not less than any other individual. Personal use above the greater of 14 days or 10% of days rented at a fair price brings in the vacation home rules. Sources: 26 CFR 1.469-1T; 26 CFR 1.469-5T; IRS Publication 527.
Rental income a lender counts
On a purchase, how Fannie Mae turns the expected rent into qualifying income.
Rule: the lender counts 75% of gross rent, then subtracts the full payment. Without 12 months of managing a rental, positive rent can only offset that property’s own payment. Your lender applies the rules to your file. Source: Fannie Mae Selling Guide, Rental Income for the Subject Property.
For education only. Not tax, legal or financial advice. Your CPA, lender and attorney confirm what applies to you. The full guides behind these calculators live in The Library, free inside The Closing Class community on Skool.