FHA Multifamily Rental Qualification

[Don Pham]

Hello all,

I had a question about FHA loans on multifamily properties, specifically about how projected rents factor into the debt ratio qualifications. Specifically,

Does the expected rental income offset the PITI for the 31% requirement or is it instead added to income for that calculation?

For example, PITI + MIP = 3,800 and expected market rents of the other units are 3,500.
Borrower's monthly income = 4,000
75% of 3,500 = 2,625

Is the calculation then 3,800 - 2,625 = 1,175 which is < 31% of 4,000 (qualifies)
or
3,800 > 31% of 4,000 + 2,625 (not qualified)

Thanks in advanced for your awesome answers!