FHA self sufficiency question

[Brendon Seiffert]

Could someone help explain the self sufficiency rule with FHA loans? Looking for a clearer answer and the lady at the bank isn't quite sure and is waiting to hear from her under writers, which won't be till tomorrow.

Right now looking at a triplex with a estimated payment of $1779.52. Since it'll be an FHA loan I'll need to live in one unit. The other two units rent for $800 a month, for a total of $1600.

Does this mean it does not pass the self sufficiency test? Even though if I wasn’t living there I’d be able to rent the entire thing and cash flow it a few hundred a month?

[John Warren]

@Brendon Seiffert your loan officer should be able to explain this to you without "waiting for the underwriter".  The self sufficiency rules are one of the main reasons I have steered some tenants towards the 5% down conventional loan. 

Self sufficiency only allows 75% of the the rents to be used, and it makes sure that the 75% of the rents can service the debt. The real kicker is that if the rents are super low because a land lord hasn't fixed the place up, the self sufficiency guidelines only allows you to use the current rents, not the market rents. 

There are some work arounds if you have a great lender, but most lenders have no idea how to do multifamily in my experience.