I actually ran across a few insurance companies that wouldn't ensure my first house simply because it had asbestos shingles on the outside which were original.

Maybe allow for a slight decrease for the top floor, just to ensure you're running conservative numbers.

One of the many cool tidbits that I learned from that episode is that you can check the rental payment amounts by zip code on the HUD User website https://www.huduser.gov/portal...Here is the list for rent amounts by zip code for Cook County: https://www.huduser.gov/portal...Here's the rent payments for the two Roger's Park zip codes:                         Efficiency           1-bed                  2-bed                 3-bed                 4-bed60626          $1,060                 $1,200             $1,390                    $1,770                $2,10060645         $1,000                $1,130               $1,310                $1,660                  $1,980I look forward to hearing about your progress moving forward!

Each unit is 1,095 sq.ft. 3BR/1BOne, 15-20 year old high-efficiency gas furnace.  

I also look at cash flow, my reserves, etc to ensure I can hold this property long enough to see those projected returns. 

Multi-families are more efficient in terms of cost.

You are taking a tax efficient vehicle (real estate) and putting it inside of another tax efficient vehicle (IRA).

I'd like to create an official rent contract applied to the room they'll be staying in, but want to ensure this is fine within context of the loan (assume primary occupancy still valid since only renting room).

Basically the lender will add up all your income and all of your debts, including the PITI on the new refinance loan and ensure that your debt-to-income ratio meets those FNMA guidelines for whichever program you are attempting to qualify.  

Location can be huge, too.I have seen duplexes and multi-families work, I have a friend that does well with an ADU efficiency above a detached garage.