House hacking with FHA

[Tyson Hartley]

I recently read an article that stated FHA would allow possible rents as part of loan consideration. I was told by a loan officer that this is not the case.

Does anyone have any knowledge of this? Has anyone use an FHA loan for house hacking and if so was possible rent taken into consideration?

[Mitch H.]

Im not sure if it was in reference to FHA specifically, but I recently spoke with a local lender in a similar vein.

The lender mentioned, when pre-approving me, that for an income (owner occupied duplex) property, my pre-approval would be based on market rents for the property, rather than my income.

Basically, I can get pre-approved for whatever I want, so long as the market study comes back with supportive rents.

I was surprised at this, and maybe even slightly alarmed. It was my understanding that properties with less than 5-units are treated as residential, and therefore income based lending.

Can anyone provide some color on this?

Sidenote: the lender also said rates (on small multis) are much better with FHA financing than with Conventional (PMI not included).