The 24-Month Rule: Seasoning for Major Housing Events

Rule

Lendency requires a 24-month seasoning period following any major housing event (Foreclosure, Bankruptcy, etc.). Additionally, for all mortgage debt, we require a clean history with no more than one 30-day late payment in the most recent 12-month period.

Lendency Insight

While a 24-month gap after a bankruptcy shows long-term recovery, your recent payment history is a more accurate predictor of future performance. This is why we look closely at the last 12 months of your mortgage payments. A single "slip up"—one 30-day late payment—can happen to anyone due to a bank error or a mailing delay, so we allow for one isolated incident. However, two or more late payments in a year suggest a cash flow problem that makes a property a higher risk for a DSCR loan.

Common Scenarios & FAQs

• Does a 30-day late payment count as a "Housing Event"? Not in the same category as a foreclosure or bankruptcy. An isolated 30-day late payment within the last 12 months is acceptable. However, if you have two 30-day lates, or a single 60-day late, the loan will likely be ineligible until that history "seasons" out.

• What if the late payment was on my primary home? The rule applies to all mortgages reported on your credit, whether they are for your home or your rentals.

• How do you verify this? We review the "rating" for each mortgage line item on your tri-merge credit report.

Key Definitions

• 30-Day Late: A mortgage payment that is not received by the lender within 30 days of the due date.

• Housing Event: A major legal or financial disruption to property ownership, such as a foreclosure or short sale.