The test uses the appraiser's market rents, and it applies to 3-4 unit properties only. FHA's self-sufficiency test asks whether the property can carry itself. Take the appraiser's determined market rents for all units, including the one you will live in, apply a 75% factor (the 25% haircut covers vacancy and maintenance), and that figure must equal or exceed the full monthly payment, including principal, interest, taxes, insurance, mortgage insurance, and any HOA dues. Duplexes are exempt; the test applies to 3-4 unit purchases. Program rules change, so confirm the current requirement. To your specific question: qualifying rents come from the appraiser's market-rent analysis rather than the current tenants' actual rents. A unit renting well under market on an old lease does not sink you on that basis, and a unit renting above what the appraiser supports does not help you. The honest catch: this test is genuinely hard to pass in high-cost coastal California, whether Southern California or the Bay Area. Appraiser market-rent surveys there tend to come in below what units realistically fetch in a hot rental market, and the payment on an expensive property is large, so the 75% math often falls short. In lower-cost markets the same test is very workable, and plenty of first-time buyers use FHA to get into small multi-units. If you are eyeing a 3-4 unit, we can pressure-test the self-sufficiency math on a free Roadmap conversation (about 20 minutes).