FHA House Hack Mother-in-Law

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FHA House Hack Mother-in-Law

Bill Regan
Investor · Baltimore, MD · Member since 2015 · 160 posts · 76 votes
Hi. Just viewed a house today for a FHA financed house hack. There is a mother in law apartment attached with separate utilities, mailbox, kitchen, a/c. It is zoned SF. My question is can income from this unit (approx $650/mo) be counted towards the loan?
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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y
    Originally posted by @Bill Regan:

    Hi. Just viewed a house today for a FHA financed house hack.
    There is a mother in law apartment attached with separate utilities, mailbox, kitchen, a/c. It is zoned SF.
    My question is can income from this unit (approx $650/mo) be counted towards the loan?

     If the appraiser calls it a duplex, yes.

    If the appraiser calls it a SFR w/ ADU, not with FHA. This seems most likely based on what you have described, but of course neither I nor anyone else can guarantee what an appraiser will say.

    The relevant niche product here is actually Fannie Mae HomeReady 97% LTV, not FHA (in general I think most folks starting out need to stop with the assumption that FHA is automatically always the best way...). Make sure your lender offers it, without overlays. 

    This is relatively new, so it may be the appraiser's (or your lender's) first time doing a rent roll for a SFR owner occupant property (specifically, the ADU). Tip you can pass onto your lender: that PDF I just linked? Print it, circle the "NOTE:" at the bottom and put stars around it like an 8 year old, underline where it says "...with an explanation from the appraiser...", scan it back to PDF, and include that with the appraisal order so the appraiser knows exactly what to do on her or his first try! It's these little details (I'm dead serious about the elementary school kid-style stars) that can prevent delayed closings, and let you close on time or weeks early (that can  be a deal maker/breaker with a distressed seller facing foreclosure etc). 

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  • Melvin ListBusiness Member
    Lender · Tampa, FL · Member since 2016 · 1k+ posts · 381 votes
    9y

    @Bill Regan good advice from @Chris Mason in regards to how the how the appraiser labels the property.  I would also look into a 3% or a 1% down payment option conventional.

    C2 Financial
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