The relevant section is here:Treatment of the Income (or Loss)The amount of monthly qualifying rental income (or loss) that is considered as part of the borrower's total monthly income (or loss) — and its treatment in the calculation of the borrower's total debt-to-income ratio — varies depending on whether the borrower occupies the rental property as his or her principal residence.If the rental income relates to the borrower’s principal residence: The monthly qualifying rental income (as defined above) must be added to the borrower’s total monthly income.

So, in this case the 10% is the capitalization rate.Now, it's important to define that figure of $5,000.

You can't move toward a goal without defining it first.

I know of both "POF" used to mean preparation of a letter prepared by my bank to show that I have proper funds in the bank to cover a CASH purchase or an agreed deposit amount (which accompanied my RE offer) and "POF" used to define a letter generated from the lender (mortgage provider) verifying my pre-approval for financing needed to close the deal. 

ahhh I did reread.... son and daughter both currently occupy, but all three must have little income as an $8 contribution, that could change on renewal if she is now receiving disability, and definately will change if two more adults added depending on their income status, if students, college or high school?

If so, where was your project, what renovations were made and how much did they cost, and what was the return on cost goal/target percent (if the goal was a different metric, then what was that) and why (RoC assumed to be defined as achieved rent increase/renovation cost)? 

I'm eating up the podcasts and slowly building my library at home to ensure I'm setting clear, measurable goals towards a defined end.

@Bill S. and @Jared Bouzek the 2 policies is not the defining issue, but clarifying the are 2 separate buildings.  

Unless there's a confusion with the tax id. they should not ask for anything else than tax ID, (or SSN), for a " US person " (as defined by the IRS).

There all all kinds of investments that historically outperform "Real Estate" As an ambiguously defined investment device.