Lenders for Owner Occupied ADU Deal

[James Bianco]

Hi BP,

I have been on a mission to find a SFH in Los Angeles with a permitted ADU that I could live in, and rent out the house. Classic house hack. After finding a property that seemed perfect, my finance guy hit me with some unfortunate news:

Turns out, lenders won't count rental income against the mortgage if the owner lives in the guest house rather than than the main house of a zoned SFH. Without that, I can't qualify income-wise for homes 700k and up, even with great credit and the down payment.

Are there any lenders out there that would approve this type of deal? An owner occupied ADU, home rental?

Or do I need to revert back to the multi-family strategy?

Thanks,

James