Income Approach for FHA on Duplex

[Phil Bullock]

I recently received an offer to purchase a duplex I own. The appraisal came back at roughly 65K less than asking. When I look at the appraisal, I see that he struggled to find comparable properties in the area and ended up using duplex properties 12 and 13 miles away... OK I get it. However, on his income approach, he decided to use only rents for 1/2 (1 unit) of the duplex (stating that with FHA owner-occupied loans, he can only use the income from the half the owner will not live in). There is no way this can be correct! Is he right?