Lender Saying Can Avoid FHA Self-Sufficiency Test

[Frank McGovern]

Hey all,

I'm curious what may be happening here and how this could ever be possible. I don't believe it, but just wanting to see if there is any legitimacy to this and if it's ever happened.

Properties would be a 3-4 unit, not SFH or 2-unit. I have a lender that does many FHA loans, and this broker has talked to several of their underwriters and their manager about if a property fails the self-sufficiency test, what can they do. He has stated that due to enough of an income level to qualify on the mortgage, they can choose to not bring in rental income and can avoid the test. He literally gave them an exact scenario of a legitimate property for sale now and showed them market rents and how it would very much fail the test (not even close like under $100 or anything). They all still held steady in their statement to him that they can still underwrite the loan and as FHA (not another portfolio special option).

Has anyone ever heard of anything like this being possible? I doubt this can ever happen and I could see a broker being wrong about this, but to also get clarification from the underwriting team?

I'm guessing I should stay far away from this lender.