(MA) 617-297-8641 (RI) 401-641-5774

Contact@MandrellCo.com

Criminal Record and Apartment Rentals

2016 has been a year of initiatives, laws and policies affecting homeowners, and renters. One such “guidance”  as it pertains to screening tenant applicants with a criminal history record. I have mixed views on this as I can see both sides of the argument.

Tenant: I made a terrible mistake when I was 19 that has remained on my record. Now at age 29, I am trying to find an apartment and I am constantly being denied due to my prior criminal history. THEN I was a nuisance to society but today… I stand before you an upstanding citizen. I have my Master’s degree in Physical Therapy, I make $75,000/year but I cannot find an apartment because of my prior transgression. How do I grow? How do I move on to the next stage of life if I am constantly penalized for a mistake I made 10 years ago?

Landlord: The government is imposing poilicies and laws that make it increasingly harder to protect my investment. I believe in giving people a chance but I do not want to be forced into a decision. Criminal background checks are meant to protect my tenants. They want a safe place to live and not feel threatened. If someone has a history of violence or burglary… how can I in good conscience, accept them as a new tenant? I understand people change, but am I not failing in my duty as a landlord to the tenants I currently have? I believe this creates undue tension between landlord and good tenants.

I can argue either side. I choose to see the good in people most times but I do not want to be forced to overlook something that troubles me. I do also see the connection between minorities disproportionately being affected by this decision. What is the middle ground? How do we obtain more information on a person’s record with regard to timeline of criminal activity? Something I will be following over time to see what develops.

For more details see the excerpt below on the decision.

HUD issued legal guidance from the Office of General Counsel (OGC) regarding the likely violation of the Fair Housing Act when housing providers employ blanket policies in refusing to rent or renew a lease based on an individual’s criminal history because such policies may have a disparate impact on racial minorities. The guidance states, “Because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely disproportionately to burden African-Americans and Hispanics.” The protected classes of the Fair Housing Act are race, color, national origin, religion, sex, familial status, and disability.

The guidance states that when a housing provider’s seemingly neutral policy or practice has a discriminatory effect, such as restricting access to housing on the basis of criminal history, and has a disparate impact on individuals of a particular race, national origin, or other protected class.

Some landlords and property managers assert that the reason they have blanket criminal history policies is to protect other residents and the property. Landlords and property managers must be able to prove through reliable evidence that blanket policies actually assist in protecting residents and property.

The guidance also states that a housing provider with policies of excluding people because of a prior arrest without conviction cannot satisfy its burden of showing such a policy is necessary to achieve a “substantial, legitimate, nondiscriminatory interest,” since an arrest is not a reliable basis upon which to assess the potential risk to residents or property. In instances when a person has been convicted, the policy must be applied on a case-by-case basis considering the nature and severity of the conviction, what the individual has done since conviction, and how long ago the conviction took place.

In addition, the guidance discusses how a housing provider may violate the Fair Housing Act if the provider intentionally discriminates when using criminal history information in evaluating applicants and tenants. “This occurs when the provider treats an applicant or renter differently because of race, national origin or another protected characteristic. In these cases, the housing provider’s use of criminal records or other criminal history information as a pretext for unequal treatment of individuals because of race, national origin or other protected characteristics is no different from the discriminatory application of any other rental or purchase criteria.”

The HUD guidance is at http://1.usa.gov/1TwM6m5

 

If you are a landlord and looking for assistance in finding quality tenants for your units… Call The Mandrell CompanyCall The Mandrell Company. We work hard to screen tenants to ensure you have the most qualified and highly referred tenants.

Read more

Pros And Cons Of Using a Hard Money Lender

Whether you’re investing in a property to fix and sell, a landlord looking to invest in rental property, or a builder looking to get a construction loan, you’ve likely heard that hard money loans from private lenders are the best way to go. This all sounds like a no brainer but you should truly understand the difference between the two and if it makes financial sense for what you are trying to accomplish. Here we’ll talk about the pros and cons of choosing a hard money loan, and some things to expect when going through them.

Pros Of Hard Money Loans

  • Quick Approval: For Fix and Flips or construction loans, the borrower will typically be hard-pressed to get the loan within a certain amount of time that traditional lenders may have difficulty adhering to, due to the mountains of paperwork required and long standard approval processing times. With hard money loans, however, you can expect to close on a deal much more quickly – some within as little as 24 hours, for Boston we’ve average around 7 days. Once you’ve developed a relationship with a lender, the process can move even more quickly, allowing you to turn your properties around and make a faster profit.
  • Flexibility: because hard money lenders don’t use a complicated standardized underwriting process, they are able to evaluate each deal individually, and depending on your situation, and your relationship with the lender, you may have a little more wiggle room. This makes them much easier to work with than traditional lenders.
  • More Collateral Options: with hard money lenders, they are investing in the value of the property or properties themselves, not your individual credit. Due to this, they are typically willing to accept different types of collateral as long as the borrower can present profitable collateral to secure the loan. This means presenting them with solid plans for the property, as well as value of the land and the property as it is currently, to give them a better understanding of what they are working with. 

Cons Of Hard Money Loans

  • Higher Interest: the one major downside of hard money loans is the typically higher interest and fee rates due up front. The higher terms are due to the fact that they focus on the property value rather than the borrower, but may increase the risk on the borrower’s part. When choosing a hard money loan, make sure you’re managing your investments carefully and properly to avoid default or loss of property.
  • Short-Term Only: because they are private loans and are used primarily for the renovation, building, or flipping of property, many hard money loans are only available as a short-term means of financing. These usually range anywhere from 6 months to 2 years, and because of this the payments per month are typically higher along with the higher interest rates.

If you are interested in finding competitive rates for funding your investment real estate deal, check out one of our partners US Flip Funding. They make lenders compete for your business, ensuring you get the lowest rates in town.

For more information on Real Estate Financing or to learn from industry experts, feel free to contact us directly at Contact@Mandrellco.com or visit our networking group at Boston Wealth Builders where seminars are free but the resources are priceless.

Read more

Today we sat down and talked with Anastasia Tacewicz from GMH Mortgage Services on a couple different topics. One such topic had to do with different strategies one can implement to improve their current credit score or simply establish credit without much of a history. If you have done any sort of credit research, you know that there is a ton of different information out there regarding this topic. It almost seems like everyone has a different perspective on how to best handle your credit so it’s great to hear one from a mortgage professional.



Need more info about mortgages or about getting pre approved? Contact us at 617-297-8641

Read more

With mortgage rates remaining near historic lows, many financial experts are making the case that student-loan debt doesn’t have to hold back millennials from buying a home. But the message isn’t getting across: Nearly 70 percent of millennials say they are delaying a real estate purchase because of their student debt load, according to a new survey by CommonBond.

Forbes.com recently highlighted whether a person with student-loan debt was ready to become a home owner with the following assessment:

  • Debt-to-income ratio isn’t everything. Yes, the proportion of your income that goes toward paying your debt is a central determinant of whether you’re ready to buy a home. Most lenders require a debt-to-income ratio of 36 percent or less to qualify for a mortgage. But a buyer with student-loan debt shouldn’t worry that their number will automatically disqualify them. The key is that they pay their bills on time and still have enough income left over to compensate for their debt.
  • You can still handle more debt. Life is all about balance. Take a serious look at your monthly budget/income. You either need to have a large enough cushion (20% down payment) or calculate what your monthly expenses would be to own a home. If the cost of owning is around the same as renting (all included), then you should be adjusting and preparing to purchase. The best interest rates tend to go to those who can offer a 20 percent down payment, but loans are available that require as little as 3 percent down on a home.
  • Make a budget. To save for the down payment, would-be buyers need a budget in place. Katie Brewer, a certified financial planner in Dallas, suggests budgeting with broad buckets: fixed expenses, variable expenses, and longer-term goals (e.g. paying down debt, buying a home, or saving for retirement). Brewer recommends keeping fixed expenses to 50 percent or less of your overall budget. There’s no one budget style that is more effective, however. The important part is to just pick a method and then start working toward the goal — saving for a down payment, in this case. With the Boston rental market being as aggressive as it is… It may be a great idea to downsize for a bit so you can save. Get Roommates, Eat out less, Decrease leisure spending. You have to tweak your “budget” to what makes logical and financial sense to you. I am a firm believer in those who want something bad enough…will do everything in their power to make it happen. The question then becomes: HOW BAD DO YOU WANT IT?

If You would like more strategies on saving up for a home or would like to speak with one of our trusted mortgage lenders for more strategies on preparing for home ownership, please email us at Buy@MandrellCo.com.

Read more