Posted by John P. (CO) on July 25, 2001 at 24:35:22:
Note: My knowledge of this subject may be out-dated as FHA has significantly changed many of their guidelines in the last few months and I have not kept up with them. That said, here is what I once knew to be true about owner-occupied multi-units:
Generally speaking, you can count 75% of the expected rental income (allows for vacancies and maintenence costs) as income at the time of application. The actual rental income figures the underwriter will use to determine your income to debt ratios are based upon the recommendation of an FHA approved appraiser. (You’ll need to pay extra to have the appraiser do comps, a write-up, and submit rental values for each unit.) In some parts of the country, or certain neighborhoods, the usable ratio may be as high as 90%.
A lender who specializes in FHA loans will know the current guidelines for your area and you can visit www.hud.gov for more info.