When buying a 2 to 4 unit home, you can use the future rental income from the property to help you qualify for the mortgage. Still, the rules vary depending on the type of loan you use.
FHA loan: The lender will add up to 75% of the rent you expect to receive to your qualifying income, making it easier for you to get approved for the loan. For example, buy a duplex, and the rental unit generates $1,000 per month. As a result, you can add $750 to your monthly qualifying income.
Conventional loan: Likewise, the lender will add up to 75% of the rent you expect to receive to your qualifying income. However, there is one significant restriction - you must have a primary living expense
For example, you must be paying rent or making a mortgage payment. If you live rent-free with a parent or sibling, the lender won't allow you to add the rent to your qualifying income.
Calculating Monthly Qualifying Rental Income