FHA Self-Sufficiency Calculator

FHA Self-Sufficiency Calculator

Understanding the FHA 3-4 Unit Self-Sufficiency Test

If you’re considering an FHA loan for a property with three or four units, it’s essential to understand the self-sufficiency test. This requirement ensures that the property generates enough rental income to cover its expenses. Here’s what you need to know.

What is the FHA Self-Sufficiency Test?

The FHA self-sufficiency test is designed to evaluate whether the rental income from a 3-4 unit property is adequate to cover the mortgage payments, property taxes, insurance, and other associated costs. This helps to minimize the risk for both the lender and the borrower.

How Does the Self-Sufficiency Test Work?

To pass the self-sufficiency test, the expected rental income must be at least equal to or greater than the mortgage payment (including principal, interest, taxes, and insurance). Here’s a step-by-step breakdown of the process:

  1. Estimate Rental Income: The first step involves estimating the rental income for each unit in the property. This is typically done using either actual rents from current tenants or market rents for similar properties in the area.
  2. Calculate Net Rental Income: From the estimated rental income, 25% is subtracted to account for potential vacancies and maintenance costs. This gives the net rental income.
  3. Compare with Mortgage Payment: The net rental income is then compared to the total mortgage payment. To pass the test, the net rental income must be equal to or greater than the mortgage payment.

Example Calculation

Suppose you are looking to finance a 4-unit property with an FHA loan. Here’s a simplified example to illustrate the self-sufficiency test:

  • Estimated Monthly Rental Income per Unit: $1,000
  • Total Estimated Monthly Rental Income: $4,000 (4 units x $1,000)
  • Net Rental Income: $3,000 (75% of $4,000)
  • Total Monthly Mortgage Payment: $2,500

In this case, the net rental income of $3,000 is greater than the mortgage payment of $2,500, meaning the property passes the self-sufficiency test.

Why is the Self-Sufficiency Test Important?

Passing the self-sufficiency test is crucial for securing an FHA loan for a 3-4 unit property. It ensures that the property can financially sustain itself, reducing the risk of default. This requirement helps protect both the lender and the borrower by confirming the property’s potential to generate sufficient income.

Preparing for the Test

To prepare for the self-sufficiency test, it’s important to gather accurate rental income data and carefully calculate your expenses. Working with a knowledgeable mortgage loan officer can help ensure you meet the requirements and understand the nuances of the process.

FHA Self-Sufficiency Calculator

To see if a property passes the self-sufficiency test, use this calculator!


The FHA 3-4 Unit Self-Sufficiency Test is a key component of securing financing for multi-unit properties. By ensuring the rental income covers the mortgage and associated costs, this test helps maintain the financial health of the property and minimizes risk for both borrowers and lenders. For more information and personalized guidance, reach out to one of our mortgage experts today.