3-4 Unit FHA

[Jordan Fiore]

Hey All,

This is just a reminder post on the FHA rule on 3-4 unit buildings. I have seen this issue come up 2-3 times in the last couple months pertaining to FHA buyer wanting to house hack a 3-4 unit building here in Cincinnati. Since the 4 units are taxed commercially their tax rate is around 3%+, which can put a serious dent into the numbers.

FHA requires that the net rental income of a 3-4 unit property be equal to or greater than the monthly mortgage payment (PITI), ensuring the property can cover its expenses.

Ever since the massive reassessment across Hamilton county a little bit ago, this has become a serious problem for the 4 units priced $400k+ to hit this requirement. Make sure your lender knows about this up front because they could have been in the industry for 10+ years but only now come across this problem.

Jordan