How can you House Hack in Expensive Markets?

[Tim Swen]

Hi BP-

I've been reading books about FHA house hacking but it just doesn't seem feasible in expensive markets. So I was wondering if I missed anything?

Take NYC(where I live) for example. I've seen most of the 2 family homes range between $800K to $1.2M. And FHA Maximum Mortgage Amount for a 2 family home is $1,053,000.00. If I were to take out a 3.5% down 30 year FHA loan then here's the breakdown for a $1,053,000.00 and $850,000.00 home respectively at the bottom of the page.

If the DTI for getting an FHA loan is 31%. Does it mean you need to make at least $258K to be able to house hack in NYC?

Sales Price		$ 1,053,000.00	$ 850,000.00
Down Payment (3.50%)		$ 36,855.00	$ 29,750.00
Mortgage Amount		$ 1,016,145.00	$ 820,250.00
FHA Funding Fee (UFMIP) +		$ 17,782.54	$ 14,354.38
Mortgage Amount (Final)		$ 1,033,927.54	$ 834,604.38
PITI
Principal & Interest		$ 4,715.24	$ 3,806.22
Annual Real Estate Taxes		$ 1,422.58	$ 1,190.00
Annual homeowner's insurance		$ 1,000.00	$ 1,000.00
FHA MIP = 1% X Base Mortgage/12 months		$ 846.79	$ 683.54
MONTHLY MORTGAGE PAYMENT =		$ 7,984.61	$ 6,679.76
DTI	0.31
Monthly Income Requirement		$ 25,756.81	$ 21,547.61
Yearly Income Requirement		$ 309,081.68	$ 258,571.35