Choose the legal unit count and identify the unit you will occupy. Do not enter imagined rent from your own apartment as current cash receipts. An owner occupied purchase must fit the actual program, property and occupancy requirements.
Enter the building and the household
Enter price, down payment, principal including any accepted financed charges, rate and term. Add buyer estimated taxes, actual insurance, mortgage insurance, association costs and other housing obligations. Use property records, quotes and the proposed loan worksheet rather than a seller's inherited tax or insurance figure.
For each rental unit, enter supported rent, lease status and whether it is available immediately. Include vacancy, collection loss, repairs, capital replacements, management and owner paid utilities. A reserve for future replacement is not the same as today's repair invoice.
Enter closing costs, immediate work, furnishings where relevant and the cash cushion to retain. The down payment is only one part of the initial funding need. A building with tenants or anticipated rents can still need cash for turnover and repairs before receipts begin.
Read two different results
The operating view subtracts vacancy and expenses from rents actually modeled for the rented units. It then compares the remaining contribution with the complete housing payment. The result is the owner's modeled monthly housing contribution or surplus, before personal income taxes and any omitted costs.
The qualification view uses income and debt treatment accepted by the lender. Conventional rental guidance addresses documentation and how subject property income is used. [1] The tool does not subtract every projected rent dollar from the mortgage and call that a lender debt ratio.
FHA three and four unit properties have an additional self sufficiency review under HUD's handbook, distinct from the owner's operating budget. [2] The test can consider appraiser rents for all units, including the owner's, without creating real rent from the apartment you occupy.
VA review also needs eligibility, accepted rental treatment and residual income analysis; a simple ratio alone is incomplete. [3] Changing the program selector organizes the required information. It does not approve the buyer or supply universal rent factors.
A hypothetical fourplex budget
Assume a $750,000 purchase, $150,000 down payment, $600,000 principal, 6.5% fixed annual rate and 360 payments. Add $800 monthly buyer taxes and $350 insurance, with zero mortgage insurance and association dues expressly assumed for this illustration.
| Monthly item | ** Assumed amount** |
|---|---|
| Principal and interest | $3,792.41 |
| Complete listed housing payment | $4,942.41 |
| Three rented units at $1,800 each | $5,400.00 |
| Vacancy and collection allowance | $270.00 |
| Maintenance | $300.00 |
| Capital replacement reserve | $300.00 |
| Owner paid utilities | $200.00 |
| Management allowance | $270.00 |
| Rent contribution after listed operating allowances | $4,060.00 |
| Owner's modeled monthly contribution | $882.41 |
The rent exceeds principal and interest, yet the complete budget still leaves a contribution for the owner. These are hypothetical inputs, not market rents, program terms or a promise that the property will perform this way.
Suppose closing costs are $20,000, immediate repairs $15,000 and desired retained cash $30,000. Together with the $150,000 down payment, modeled initial funds total $215,000, before any other costs. The retained $30,000 is not spent at closing; it must remain available.
Stress vacancy and a later move
Test an empty unit, a delayed lease start and a major repair. Do not lower the vacancy allowance simply because the current tenant says they intend to stay. A short interruption can matter when the owner relies on the rents to carry the building.
For a later move out, add supported rent for the former owner's unit, then revise insurance, taxes, management and operating costs for full rental use. Review occupancy commitments and the actual financing with the lender before assuming conversion changes nothing. Future appreciation and rent increases should not be required to make today's purchase work.
Use the owner occupied multiunit construction guide if the building is being built, the Florida affordability tool for the household payment and the calculator hub for related estimates.
Send Dane the unit schedule, leases or rent evidence and the vacancy stress result. A useful house hack plan shows what you can carry when rent is interrupted, alongside the lender's separate qualification calculation.
This calculator gives an estimate only. It is not a loan offer or approval.
Sources
- Fannie Mae, general rental income information and subject property rental income.
- HUD, currently published Handbook 4000.1 and updates, Three to Four Unit Properties and applicable rental income provisions. Confirm effective policy for the transaction.
- VA Lenders Handbook, Chapter 4, credit underwriting and rental income.