Clients buying multi-unit properties? This is how FHA determines “self-sufficiency”. “Net Self-Sufficiency Rental Income is calculated by using the Appraiser’s estimate of fair market rent from all units, including the unit the Borrower chooses for occupancy, and subtracting the greater of the Appraiser’s estimate for vacancies and maintenance, or 25 percent of the fair market rent.”

Answer: [tweet-start]Before you sell a multi-unit property using FHA financing, contact me to talk about establishing “self-sufficiency”. [tweet-end] The instructions for determining self-sufficiency are below in the guideline. I’ve also provided 2 other pertinent guidelines regarding reserves and calculation of effective Rental Income when purchasing a 3-4 unit property. Reference: 4000.1 II, A, 1, b, […]

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