Real Estate & Multi-Unit•Fannie Mae 75% Qualifying Rule
House Hacking Calculator
Calculate your net out-of-pocket housing expenses and lender qualifying income when house hacking a duplex, triplex, ADU, or multi-bedroom primary residence with our free rental offset calculator.
House Hacking Efficiency
Tenants pay 51.4% of your housing costs!
Your gross mortgage PITI is $3,150/mo. After receiving $1,800/mo rent (setting aside 10% reserves), your net housing cost drops to just $1,530/mo.
Full Gross PITI Payment$3,150
P&I: $2,702 | Tax/Ins: $448
Net Effective Housing Cost$1,530 / mo
Total Offset: 51.4% Covered
Lender Qualifying Offset (75%)+$1,350 / mo
DTI Qualifying Credit: 75% of Gross Rent
Monthly Outflow vs. Tenant Offset Breakdown
Detailed accounting of monthly PITI components, tenant rental reserves, and lender qualifying DTI income credit.
| Expense / Income Component | Monthly Amount | % of Gross PITI |
|---|---|---|
| Principal & Interest (P&I) | $2,702 | 85.8% |
| Property Taxes & Home Insurance | $600 | 19.0% |
| PMI (Private Mortgage Insurance) | $196 | 6.2% |
| Total Gross PITI Payment | $3,498 | 100.0% |
| Gross Tenant Rental Income | +$1,800 | -51.5% |
| Less: Vacancy & Maintenance Reserves (10%) | -$180 | +5.1% |
| Net Effective Out-of-Pocket Housing Cost | $1,878 | 53.7% |
| Lender Qualifying DTI Income Offset (75% Rule)75% of gross rent counted by Fannie Mae/Freddie Mac/FHA to offset PITI. | +$1,350 | Qualifying Offset |
Frequently Asked Questions
Fact-checked guidance grounded in Fannie Mae & FHA 75% DTI qualifying rules.
What is house hacking?▾
House hacking is a real estate strategy where you buy a primary residence (such as a 2–4 unit duplex/triplex/quadplex or a home with an ADU/extra rooms), live in one unit, and rent out the remaining space to tenants to offset or eliminate your mortgage payment.
Can rental income help me qualify for a mortgage?▾
Yes. Under Fannie Mae, Freddie Mac, and FHA guidelines for 2–4 unit primary residences or ADUs, lenders allow you to use projected or lease-backed rental income to offset the property's PITI mortgage payment when calculating your Debt-to-Income (DTI) ratio.
Do lenders count 100% of rental income toward loan approval?▾
No. Lenders apply a standard 25% vacancy/operating expense haircut under Fannie Mae/FHA rules, counting 75% of gross projected rental income (verified via executed leases or Form 1007 appraisal market rent reports) to offset your mortgage.
Can I house hack a single-family home by renting out rooms?▾
Yes, but lender qualification rules differ. Renting individual rooms in a single-family home provides real monthly cash flow to lower your out-of-pocket living cost, but lenders usually require 12 to 24 months of claimed Schedule E tax history before counting room boarder income for mortgage underwriting.
Lender Qualification & Regulatory Rules:
- Lender 75% Qualifying Haircut: Under Fannie Mae, Freddie Mac, and FHA guidelines for 2-4 unit primary residences or ADUs, lenders typically apply a 25% vacancy/operating haircut, counting 75% of gross rental income (from leases or appraisal Form 1007 market rent reports) to offset your PITI payment for Debt-to-Income (DTI) qualification.
- Single-Family Room / Boarder Rentals: Lenders usually require 12 to 24 months of claimed rental income on IRS tax returns (Schedule E) before counting room rental income from a single-family primary home.
- Reserves & Cash Flow: Setting aside 5% to 10% for vacancies and maintenance is crucial to protect your personal budget during tenant turn-over or unexpected structural repairs.