Did you know this FHA Rule for 3-4 Unit Properties?

Cornerstone Mortgage Group, a leading mortgage company in New Jersey offers premier mortgage services. Whether you are looking for a home loan to purchase your first home or looking to get a better mortgage rate on your current house.

If you're looking to buy or sell a three to four-family property and are considering FHA financing, it's important to be aware of the FHA's self-sufficiency test. This guideline is designed to assess the property's ability to generate enough rental income to cover the mortgage payments.

The self-sufficiency test is a critical factor in determining whether a property qualifies for FHA financing. It takes into account the rental income generated by the property and compares it to the proposed mortgage payment. If the property fails to meet the FHA's self-sufficiency guidelines, it may not be eligible for FHA financing.

This guideline is intended to ensure that the property is generating enough rental income to support itself and that the owner is not relying solely on the FHA loan to make the payments. The self-sufficiency test is typically based on the number of units in the property, with a higher number of units requiring a higher level of rental income.

To pass the self-sufficiency test, the property must generate rental income that is equal to or greater than the proposed mortgage payment. In some cases, the FHA may require that the rental income exceed the mortgage payment by a certain percentage, typically around 25%.

If you're considering purchasing or selling a three to four-family property using FHA financing, it's essential to understand the self-sufficiency test and its requirements. A knowledgeable mortgage professional can help guide you through the process and ensure that you're meeting all of the necessary guidelines.

At Cornerstone Mortgage Group, we specialize in helping our clients navigate the complex world of mortgage financing. If you're looking to buy or sell a three to four-family property, we can help you understand the FHA's self-sufficiency test and ensure that your transaction is a success. Contact us today to learn more.