You cannot use rental income above your mortgage payment to help qualify for a larger mortgage, but you can utilize 100% of the lease income to offset so that should help you qualify for more of a mortgage. 

Any of the above kills the STR loophole under this "substantially all work" option for material participation.Is there a way to qualify if all my outside help was a cleaning lady for 2 hours?

Hey,If "building class designation" is the same as zoning, then this seems like it can definitely be appraised as a two family, with both the legal and actual designation as a two family.Depending where in NYC, that may not help your valuation, as primary residences sometimes sell for more than investment properties, so check that out before challenging the appraisal and definitely before paying for another one.Double check all this with your lender/broker as well.Best of luck!

@Diane Perry is right, it's a cumbersome statute but the first thing you must do is have a qualified intermediary in place before your sale. 

Investment Info:Single-family residence buy & hold investment.

Then, you need to study the IRS Publication 523 regarding the Sale of a Residence.

That being said, if this is a Heloc for an investment property and not your primary residence, most banks and CU's treat these as commercial LoCs, so the rate is likely be 9-12%.

Cost segregation and bonus depreciation may create paper losses during the holding period, potentially offsetting some preferred return income if you have passive income or qualify as a real estate professional.This post does not create a CPA-Client relationship.

My wife and I are officially under contract with a new primary residence, with the goal of moving and then turning our current home into a rental.

Investment Info:Single-family residence fix & flip investment.