HMO mortgages for Vulnerable Tenants – Social care

NON-Standard HMO mortgage solutions for landlords

If you have been beavering away trying to find lenders that can look at non-standard HMO mortgages then stop you have come to the right place.

HMO mortgages with Vulnerable Tenants are hard to come by for casual HMO Mortgage Brokers. They are not visible on industry mortgage search engine tools but they do exist and seasoned HMO Mortgage Brokers should be able to help.

In this article, I will not only cover HMO Mortgages with Vulnerable Tenants but also touch on areas where you may have had difficulty obtaining a HMO mortgage on.

HMO mortgages for Vulnerable Tenants

It would be remiss of me not to start with the official definition of what a Vulnerable tenant is:

“Vulnerable tenant is defined in BS 5839-6: 2013 as: “A person aged 18 or over who is, or maybe, in need of community care services by reason of mental or other disability, age or illness, and who is or may unable to take care of himself or herself against significant harm or exploitation.”16 Feb 2017

So why are Vulnerable tenants frowed on by most HMO Mortgage Lenders making them more difficult to place than standard tenants? Well there are 3 main reasons as I see them:

1) Reputation risk. In the event of the HMO mortgage holder failing to keep up repayments repossession could trigger a social backlash and unwanted media coverage.

2) HMOs are by nature communal with shared living rooms, bathrooms and kitchens. The interaction of the Vulnerable tenants might present a challenging environment for new and existing tenants and the turnover might be higher than average. The fall out could lead to void periods and greater paperwork. The failure to achieve steady and regular revenue would be a concern to most HMO Mortgage Lenders.

3) Ensuring the property. A standard landlord insurance policy will not be sufficient. The HMO Mortgage Lender would need to know the property is protected and maintained as it is the collateral for the mortgage.

Those who are avid followers of our articles will know we actively seek out lender solutions and can provide HMO mortgages with Vulnerable tenants for professional landlords.

Below are other potentially potential difficult HMO scenarios we can help arrange mortgages on:

* HMO mortgages without a bedroom number restriction. 
* HMO mortgages with multiple storeys where certain floors are unlet.
* HMO mortgages on flats including those above commercial premises such as shops.
* HMO mortgages which are converted office units, bed and breakfasts and guest houses.
* Mortgages on mixed complexes which include part owner occupier, ASTs and HMOs.
* HMO mortgages under a UK limited company without a cap of the number of directors.
* HMO mortgages under a UK limited company with overseas directors.
* HMO let-to-buy mortgages providing another buy-to-let is owned.
* Unlimited buy-to-let portfolios in the background.
* No age restrictions.
* No minimum earned income stipulations.

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.

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