Comprehensive Summary of "Earn Your Leisure" Podcast Episode: How to Use Roommate & Rental Income to Qualify for a Mortgage

Release Date: June 25, 2025

Hosts: Rashad Bilal and Troy Millings
Podcast: Earn Your Leisure
Episode Title: How to Use Roommate & Rental Income to Qualify for a Mortgage

Introduction

In this insightful episode of Earn Your Leisure, hosts Rashad Bilal and Troy Millings delve into innovative strategies for leveraging roommate and rental income to qualify for a mortgage. Tailored for aspiring homeowners and real estate enthusiasts, the discussion bridges financial savvy with practical real-world applications, blending business acumen with pop culture relevance.

1. Exploring Roommate and Rental Income as Mortgage Qualifiers

The episode kicks off with Troy Millings introducing the concept of "swimpli"—a method of renting out personal assets like pools and backyards to generate additional income. This segues into the broader topic of house hacking, where homeowners can make their properties more affordable by renting out parts of their residences.

Notable Quote:

Troy Millings [01:25]: "You can rent out your backyard, you can run out your pool. Like I have one of my mentees every year, she rents out her backyard, her pool here in New York, and it pays her mortgage for the year."

2. Understanding Border Income and the Fannie Mae HomeReady Program

Troy Millings elaborates on border income, specifically focusing on rental income from roommates and how it can be utilized under the Fannie Mae HomeReady program to qualify for a mortgage. This program allows borrowers to include confirmed rental income in their mortgage qualification process.

Key Requirements:

• Rental Income History: Must have received rental income for at least nine of the past twelve months.
• Documentation: Includes lease agreements and proof of rent payments.

Notable Quote:

Troy Millings [02:50]: "If you are living with someone right now and you have a lease and they're on the lease with you, if they're your bona fide roommate... you can document it that they've been paying you, and then you can use that rental income as part of your income to help you qualify for your mortgage."

3. Documenting Rental Income: Practical Steps

Rashad Bilal emphasizes the importance of meticulous documentation when utilizing rental income to qualify for a mortgage. Proper records ensure that the additional income is recognized by lenders, thereby enhancing the borrower's eligibility.

Steps Discussed:

• Lease Agreements: Ensure all roommates are on the lease.
• Payment Documentation: Collect rent via cash app, wire transfer, or cash.
• Consistent Payment Records: Maintain records indicating regular rent payments.

Notable Quote:

Rashad Bilal [03:58]: "Documentation is important. Making sure you're keeping records is important. And that goes for if you're buying an individual home, but even more so in this situation when you're trying to have investment property."

4. Relationship Scenarios and Rental Documentation

The hosts explore various living arrangements beyond romantic partnerships, such as college roommates, and how these can be structured to utilize rental income for mortgage qualifications.

Scenario Example:

• A boyfriend and girlfriend living together with the lease in one person's name.
• Transitioning the non-leased partner onto the lease.
• Structuring rent payments to document income contribution.

Notable Quote:

Troy Millings [05:11]: "So it's border income. Right. So if in that same situation, you have the girlfriend... you should now put her on the lease of the apartment. And then now when she's making that contribution, don't make it on, make it cash... and make sure you put that is on the memo. January's rent, February's rent, March rent."

5. Utilizing Accessory Dwelling Units (ADUs) for Rental Income

The conversation transitions to leveraging Accessory Dwelling Units (ADUs) as a source of rental income. ADUs can serve as long-term rentals or be utilized for short-term rentals like Airbnb or VRBO, providing flexible income streams that support mortgage qualifications.

Applications of ADUs:

• Long-Term Rentals: Stable, ongoing income.
• Short-Term Rentals: Catering to midterm renters such as traveling nurses or corporate project teams.

Notable Quote:

Troy Millings [10:22]: "If you buy a home that has an ADU, you can use rental income from an ADU and it can help you qualify. You can turn that ADU into an Airbnb, play VRBO, make it a content studio... targeting midterm renters like traveling nurses."

6. Leveraging Current Events: AI Data Centers and Real Estate Opportunities

Troy Millings highlights the importance of staying attuned to current events and industry trends, such as the expansion of AI data centers, which create demand for midterm rentals. Recognizing these trends allows homeowners to strategically position their rental offerings to meet market needs.

Strategic Considerations:

• Location Proximity: Positioning properties near data centers, hospitals, or airports.
• Rental Flexibility: Offering varying lease terms to cater to transient professionals.

Notable Quote:

Troy Millings [14:50]: "All of these moves that's happening in AI, those are also real estate plays too, if you're paying attention."

7. Closing Insights

In wrapping up, Rashad Bilal and Troy Millings reiterate the significance of understanding and strategically utilizing rental income to enhance mortgage qualification prospects. They encourage listeners to adopt a team-oriented approach, ensuring all roommates are documented and aligned in financial contributions.

Final Thoughts:

• Team Effort: Ensuring all parties involved are on the same page regarding financial arrangements.
• Long-Term Planning: Utilizing rental income not just for immediate mortgage qualification but also for sustained wealth building through real estate investments.

Notable Quote:

Rashad Bilal [15:44]: "Pay off via virtual prepaid card. Allow 15 days credits and balance due if you pay off early or cancel."

Conclusion

This episode of Earn Your Leisure offers a wealth of practical advice for individuals seeking to navigate the complexities of mortgage qualification through innovative income streams. By effectively documenting and leveraging roommate and rental income, listeners can accelerate their path to homeownership and build a robust foundation for future financial success.

Note: The episode includes advertisements and promotional content from Progressive Insurance, PNC Bank, T-Mobile, and Remarkable, which have been excluded from this summary to maintain focus on the core discussion.