FHA loans on 3-4 unit owner occupant

[Anthony Marquez]

hello everyone,

Are there any mortgage brokers who have expertise and experience with FHA loans to borrowers that will be owner occupants on 2-4 unit properties and are licensed to loan in Hawaii? I would like to connect and ask some questions

[Brian Alvela]

Hi Anthony,

Sure, 1-2 units vs. 3-4 units work a bit differently for FHA. The 3-4 unit home requires what's called a sustainability test, Rental income is calculated by using the appraiser's fair market rent from all units, including the unit the borrower chooses to occupy, and subtracting the greater of 25 percent of the fair market rent or appraiser's estimate for vacancies and maintenance. From there the total PITI can not exceed the net income of the other 3 units you do not occupy.

3-4 unit home for FHA also require 3 months of piti in reserves where as the 1-2 is just 1 month.