Why is everyone always trying to get around the SAFE Act? After you qualify them as tenants (pulling their credit, verifying their income) it's not hard to get a mortgage broker to give them a letter saying they met the requirements of the SAFE Act. $50-$75 usually does it if you shop around your local REIA.
My standards are likely stronger than Dodd-Frank, anyway:
- I don't let tenants pay more than 40% of their income in housing costs, including utilities.
- I require rent to be auto-withdrawn from either each worker's paycheck or their bank account. And they do have to have a bank account!
- If they don't have a 700 credit score, I require them to create a budget that subtracts from DOCUMENTED income home rent, space rent, utilities, cell phone, child support and alimony, health insurance, student loan payments, child care, car payments, credit card min. payments, cable TV, Internet, car and renter's insurance payments, and every other "regular" monthly payment. I reserve the right to examine bank statements or receipts to verify these items. Then from the total, I use the Low Cost Plan in the USDA food cost estimate for each person:
If there isn't at least $200/mo. left over, to cover car repairs, medical co-pays, and other unforeseen expenses, I won't rent to them.
Note that you will have a few tenants who will refuse to let you look at something...bank statements, for example. Or they won't make the budget. These are the EXACT same tenants who will stop paying rent later.