What is the FHA Loan “Self Sufficiency Test” For 3-4 Unit Properties?
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What is the FHA Loan “Self Sufficiency Test” For 3-4 Unit Properties?
Question: I’m looking at a triplex – all units are one…
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Question:
I’m looking at a triplex – all units are one bedroom, one bathroom. All are currently getting rented out for $1,000/month. Market rent says they’re all $1,300/month. For an FHA mortgage, I would have to live in one unit, right? So, to understand FHA eligibility, do I base my calculations on all three units meeting the mortgage payment OR is it two units because I’m living in one unit? And which rent numbers do I use: the market rent or the actual rent?
Answer:
Yes, you are correct about having to live in one unit for FHA. Your next questions are based on the self-sufficiency test for FHA Mortgages.
Self Sufficiency Test: 75% of the total market rent (aka pro forma) for all the units has to be more than the total monthly mortgage payment. That total payment includes: principal, interest, taxes, mortgage insurance (PMI) and any other insurance (like homeowners insurance).
If your scenario passes this test, you are eligible for an FHA loan for this property ?
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