# Guarantors ### #### What is a Guarantor? Definition: A guarantor is someone who: * Is financially responsible for the lease * Does NOT occupy the property * Must pay if the tenant doesn't Important Distinctions: | Term | Occupies Property? | Financially Responsible? | | --------------------- | ------------------ | ------------------------ | | Guarantor (Co-Signer) | No | Yes | | Occupant | Yes | Varies | | Roommate | Yes | Yes (joint lease) | | Co-Applicant | Yes | Yes | *** #### Guarantors Allowed What it controls: Whether you'll accept guarantors at all. Default Setting: Yes ⚠️ Recommendation: Select "Yes" Why allow guarantors: 1. More Approvals: Applicants who fall slightly short on income or credit can still qualify 2. Risk Mitigation: A financially strong guarantor reduces your risk 3. Competitive Advantage: Many markets expect this option 4. Automatic Offering: If enabled, our team can automatically offer a guarantor as a solution when someone doesn't quite meet your criteria How it works:\ When an applicant fails income or credit requirements by a small margin, our team will: 1. Notify the applicant they need a guarantor 2. Explain what's required 3. Send them a guarantor application link 4. Review the guarantor's finances 5. Approve if the guarantor meets your guarantor criteria *** #### Guarantors Allowed for Income What it controls: Whether a guarantor can apply alongside an applicant who falls short of the income requirement. Default Setting: Yes How it works: * Applicant income: $4,000/month * Required income at 3x for $2,000 rent: $6,000/month * Shortfall: $2,000/month * Guarantor must make at least 4.5x the rent (see below) Requirement: Guarantors must meet the income level set in "Guarantor Income Requirement" (below). *** #### Guarantor Income Requirement What it controls: Income multiplier required for guarantors. Default Setting: 4.5x monthly rent Why higher than your standard requirement? The logic: If a guarantor is making 4.5x the rent, they presumably: 1. Can cover their own living expenses 2. Have margin to guarantee someone else's rent 3. Present lower risk of defaulting on their guarantee Common Concern: "But the guarantor doesn't have enough to pay their mortgage AND the rent!" Our Response: That's exactly why we set it higher. At 4.5x, they have a better financial cushion to handle both obligations if needed. Example: * Property rent: $2,000/month * Standard income requirement (3x): $6,000/month * Guarantor requirement (4.5x): $9,000/month *** #### Guarantors Allowed for Credit What it controls: Whether a guarantor can apply alongside an applicant who falls short of your credit requirement. Default Setting: Yes How it works: * Applicant credit score: 570 * Required credit score: 600 * Guarantor must have a credit score meeting "Guarantor Credit Requirement" *** #### Guarantor Credit Requirement What it controls: Minimum credit score for guarantors. Default Setting: 650 (50 points higher than the default 600 applicant minimum) Why higher than your standard requirement? Better Credit = More Reliability:\ A guarantor with stronger credit is: 1. More likely to honor their guarantee 2. Less likely to default themselves 3. More financially stable Social Pressure:\ Someone with good credit (650+) has more to lose by letting an applicant default. They're more likely to: * Step in and make payments * Hold the tenant accountable * Protect their own credit standing Mathematically Possible:\ Setting guarantor requirements higher than applicant requirements makes mathematical sense - the guarantee can lift a borderline applicant into approval range. *** #### Third-Party Guarantor Services Question we often get: "What about services like TheGuarantors, Leap, or Rhino?" Answer: We don't accept third-party guarantor services. Why not: 1. These aren't actually guarantors - They're insurance products where the company, not an individual, guarantees payment 2. Collection challenges - Much harder to collect from a corporation than an individual co-signer 3. Lease enforcement - You lose leverage when your guarantor is a faceless company 4. Underwriting differences - These services have their own approval criteria that may not align with yours What they are: Insurance/surety products, not personal guarantees. Alternative: If you want to offer this type of product, evaluate it separately from your standard guarantor policy. Some property managers accept these services but treat them differently than personal guarantors. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://help.rentzap.com/help-docs/guides/criteria-building-guide/guarantors.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.