- Casita rent can count on an FHA purchase. Since HUD's October 2023 rule change, a lender can count rent from one accessory dwelling unit, or ADU, as income.
- HUD's rule counts 75 percent of the rent. It has the lender use 75 percent of the lower of the appraiser's market rent or the lease rent, when you have no rental history on the home. Your lender's review of your full file decides what counts.
- The casita rent has a cap. HUD says ADU rent can be no more than 30 percent of the total monthly income used to qualify you.
- You need savings left after closing. If ADU rent helps you qualify, HUD asks for two months of house payments in reserve.
- Nevada's ADU law took effect July 1, 2026. It tells Clark County and its large cities to allow ADUs on single-family lots. It also lets them ban using the unit for transient lodging, meaning short stays.
It can be possible. As of October 2026, HUD lets a lender count rent from one casita or other accessory dwelling unit as income on an FHA home purchase.
HUD has the lender use 75 percent of the lower of two numbers: the appraiser's market rent or the lease rent. That rent can be no more than 30 percent of your total qualifying income.
An accessory dwelling unit, or ADU, is a small second home on the same lot. In Las Vegas it is often called a casita or a guest house. To count under FHA rules, it needs its own entrance, a bathroom and a kitchen area.
FHA loans are home loans insured by the Federal Housing Administration and made by private lenders. HUD, the federal housing agency, writes the rules in Handbook 4000.1. The version used here was last revised on August 12, 2026.
This guide covers what counts as an ADU, how the rent math works, and what the appraiser checks. It also covers Nevada's new ADU law and what it means for a Las Vegas buyer.
In short. A home with one casita stays a one-unit home under FHA rules. If the casita meets HUD's living unit rules and can be legally rented, part of its rent can help you qualify.
Plan on 75 percent of the rent, a 30 percent cap, two months of savings in reserve, and no short-term rentals.
Can casita rent count as income on an FHA loan?
Casita rent can count as income on an FHA loan when the home is a one-unit house with one accessory dwelling unit. HUD added this rule in Mortgagee Letter 2023-17, dated October 16, 2023.
Before that letter, FHA let you buy a home with an ADU. It just would not let the ADU's rent help you qualify. Now the rule sits in HUD's handbook:
"Rental Income from the subject Property may be considered Effective Income when the Property is or will be a one-unit dwelling with an ADU, a two- to four-unit dwelling, or an acceptable one- to four-unit Investment Property."
HUD, FHA Single Family Housing Policy Handbook 4000.1, section II.A.4.c.xii(I)(2)(a), page 240, last revised 8/12/2026: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
Effective income is the monthly income a lender uses to qualify you. The subject property is the home you are buying.
HUD also says the lender "may consider Rental Income from existing and prospective renters." So the casita does not need a tenant on closing day for its rent to be counted. The lender can use the appraiser's market rent and any signed lease, as covered below.
You still have to live in the main house. FHA loans are for homes the buyer will live in. Our guide to FHA occupancy rules for Las Vegas buyers explains that test (occupancy means you live there). Approval still depends on your whole file and your lender's own rules.
What does FHA count as an ADU or casita?
FHA counts a casita as an ADU when it is a separate living space with its own way in and out that meets HUD's basic living unit rules. HUD defines it this way:
"An Accessory Dwelling Unit (ADU) refers to a single habitable living unit with means of separate ingress and egress that meets the Minimum Requirements for Living Unit."
HUD, FHA Single Family Housing Policy Handbook 4000.1, section II.A.1.b.iv(B)(4)(a), page 171, last revised 8/12/2026: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
Ingress and egress just means a way in and a way out. HUD also says the ADU is smaller than the main house. It can be attached, built inside the house, or stand on its own in the yard.
HUD's living unit rules spell out what the space needs. Here is the short list:
- A full bathroom. At least a toilet, a sink and a tub or shower.
- A kitchen area. At least a sink with running water and a hookup for a stove.
- The basics. Safe water, a safe sewer hookup, heat, hot water and electricity.
So a guest room with a bathroom but no kitchen area does not meet HUD's living unit rules. Ask your lender how its appraiser would read the space before you count on its rent.
HUD also counts units. A house with one ADU stays a one-unit home. That means the one-unit FHA loan limit applies, which you can look up in our 2026 FHA loan limits for Clark County. A house with two full homes on one lot is a two-unit property instead, with its own rules.
Casita, guest room or second unit: how FHA sees each one
| What is on the lot | How FHA classes the home | Can its rent help you qualify? |
|---|---|---|
| Main house plus one casita with its own entrance, bathroom and kitchen area | One-unit home with an ADU | It can, under the ADU rent rules on this page |
| Main house plus a guest room with no kitchen area | The space does not meet HUD's living unit rules | Not as ADU rent; ask your lender how it reads the space |
| Two separate homes on one lot | Two-unit property | It can, under the two- to four-unit rules |
| A roommate renting a room inside your house | Still a one-unit home | Only with a 12-month history of boarder rent, received in at least 9 of the last 12 months (HUD's boarder rule) |
Buying a duplex or fourplex instead? The rules for those homes are in our guide to FHA house hacking with a 2 to 4 unit property.
How much of the casita rent does FHA count?
FHA counts 75 percent of the casita's rent when you have no rental history on the home. The lender takes the lower of two numbers and then counts 75 percent of it.
"To calculate the Effective Income from the subject Property where the Borrower does not have a history of Rental Income from the subject Property since the previous tax filing, the Mortgagee must use 75 percent of the lesser of: fair market rent reported by the Appraiser; or the rent reflected in the lease or other rental agreement."
HUD, FHA Single Family Housing Policy Handbook 4000.1, section II.A.4.c.xii(I)(2)(c)(i), page 241, last revised 8/12/2026: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
The mortgagee is your lender. Fair market rent is the appraiser's view of what the casita would rent for. The appraiser reports it on Form 1007, a rent comparison form.
HUD also tells the lender which way the rent goes. It is added to your income. It is not subtracted from your house payment.
What if you already rent out the casita? Say you own the home and reported the rent on your taxes. Then the lender works from your last two years of tax returns. That includes Schedule E, the tax form for rental income. A buyer who does not own the home yet has no such history, so the 75 percent rule is the one to plan around.
The buyer's job income: $5,000 a month before taxes. These figures are made up to show the math.
The casita: the appraiser puts market rent at $1,400 a month. The signed lease says $1,500 a month.
The lower number: $1,400, the appraiser's figure.
The counted rent: 75 percent of $1,400 is $1,400 × 0.75 = $1,050 a month.
Total income in this example: $5,000 + $1,050 = $6,050 a month.
The cap check: 30 percent of $6,050 is $1,815. The $1,050 of casita rent is under that, so all $1,050 can count.
Illustrative figures only, not a quote, offer, or commitment to lend. Your income, the appraisal and your lender's review will differ, and all loans are subject to credit, income, property, and underwriting approval.
More income can lower your debt-to-income ratio, which is your monthly debts divided by your monthly income before taxes. Our guide to FHA debt-to-income limits in Nevada explains how lenders use that ratio.
How does the 30 percent cap work?
The 30 percent cap means casita rent can never be more than 30 percent of the total monthly income used to qualify you. HUD puts it in one sentence:
"The amount of the Rental Income from an ADU used as Effective Income must not exceed 30 percent of the total monthly Effective Income used to qualify the Borrower."
HUD, FHA Single Family Housing Policy Handbook 4000.1, section II.A.4.c.xii(I)(2)(c)(i), page 241, last revised 8/12/2026: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
The cap matters most when your other income is small next to the casita rent. Here is a simple way to see it.
A quick decision rule. If the casita rent must stay at or under 30 percent of the total, then it can be at most about 43 percent of your other income. That comes from the math: 30 divided by 70 is about 0.43.
The buyer's other income: $2,000 a month from part-time work. These figures are made up to show the math.
The counted casita rent before the cap: the same $1,050 as above.
The test: $2,000 + $1,050 = $3,050. 30 percent of $3,050 is $915. The $1,050 is more than $915, so the cap applies.
One way to run the cap math: the most casita rent that stays at 30 percent of the total is $2,000 × 30 ÷ 70 = about $857 a month. Then $2,000 + $857 = $2,857, and $857 is 30 percent of $2,857.
Illustrative figures only, not a quote, offer, or commitment to lend. HUD states the cap but not a formula, so ask your lender how it applies the cap to your file.
Turned around, you stay under the cap when your other income is at least about 2.33 times the counted casita rent. That is 70 divided by 30. If you have income from a second job, our guide to FHA rules for second job and part-time income covers how that income counts.
Check your casita income
The casita income check below runs HUD's rent math with your own numbers. It shows how much casita rent could count and whether the 30 percent cap applies. It does not approve anyone.
Casita rent check for an FHA purchase
Uses HUD Handbook 4000.1, sections II.A.4.c.xii(I) and II.A.8.a.ii(A), last revised 8/12/2026. Illustrative only, not a quote, offer, or commitment to lend. The starting numbers are made up for illustration.
On these numbers, $1,050 a month of casita rent could count, which is under the 30 percent cap. This is not an approval. Only a lender review of your full file, including the appraisal, decides.
Illustrative only, not a quote, offer, or commitment to lend. This check assumes no rental history on the home and a casita that meets HUD's ADU rules and can be legally rented. It does not check your credit, debts, savings or the property. HUD states the 30 percent cap but not a formula, so your lender may apply it differently.
What paperwork and savings does the lender need?
For casita rent, the lender needs an appraisal with a rent comparison form, any lease, and proof that you will have two months of house payments saved after closing. Here is the list in plain words.
- The appraisal and Form 1007. The appraisal report plus a rent comparison form that shows the casita's market rent.
- Any lease. HUD asks for prospective leases if you have them.
- Two months of reserves. Reserves are savings left in your accounts after closing. HUD sets the amount at two months of PITI, which means principal, interest, taxes and insurance, the four parts of a house payment.
- Form HUD-92561. You sign a promise not to use the home for hotel or short-term stays.
- Tax returns, if you already rent it. Two years with Schedule E, when the casita has a rental history since your last tax filing.
The reserves rule is easy to miss. Here is HUD's wording for the automated review:
"If Rental Income is being used as Effective Income to qualify the Borrower, the Mortgagee must verify and document Reserves equivalent to two months' PITI after closing for one-unit with an ADU Properties."
HUD, FHA Single Family Housing Policy Handbook 4000.1, section II.A.4.d.i(C)(1), page 253, last revised 8/12/2026: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
A manual review has the same two month rule for a home with an ADU. In a manual review, an underwriter (the person who approves the loan) reads the file by hand.
Gift money and the cash you need to close are a separate question. Our FHA closing costs guide for Las Vegas covers that side.
A loan officer can walk through the home, the casita and your income with you, and explain how FHA rules would count the rent. An underwriter (the person who approves the loan) makes the final decision after a full review.
All loans are subject to credit, income, property, and underwriting approval. Not a quote, offer, or commitment to lend.
Talk to a loan officer about a casita homeWhat does the FHA appraiser check on a casita?
The FHA appraiser checks whether the casita fits zoning rules and whether it can be legally rented, and reports its size apart from the main house. HUD lists what the appraiser must report:
- A description of the casita and how buyers in the area view homes like it.
- Its living area, reported apart from the main house. HUD says the ADU is not added to the main house's square footage.
- Whether it "can be legally rented without restrictions."
- Who lives there now, and the details of any known lease.
When the lender asks for it, the appraiser gives a market rent, but only when the casita can be legally rented without restrictions. HUD also limits which rentals the appraiser can compare it to:
"The comparables used to develop the ADU market rent must not include properties rented for hotel or transient purposes, or for periods less than 30 Days."
HUD, FHA Single Family Housing Policy Handbook 4000.1, section II.D.3.b.vii(E)(2)(c), page 821, last revised 8/12/2026: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
Comparables, or comps, are other rentals the appraiser uses to judge the rent. HUD wants at least one comp that is a house with a rented ADU. If none is available, the appraiser must explain what was used instead.
HUD also says the ADU "must comport with zoning requirements, which may include a legal nonconforming use." That phrase means an older use that was allowed when it started. Today's rules may differ. So permits matter. Our guide to FHA appraisal requirements in Nevada covers the rest of the appraisal.
How does Nevada's new ADU law change Las Vegas casitas?
Nevada's new ADU law requires Clark County and its large cities to allow ADUs on single-family lots, and it took effect July 1, 2026. The law began as Assembly Bill 396, approved June 6, 2025, and is now NRS 278.257.
It applies to counties with 100,000 or more people and cities with 60,000 or more. The bill's digest names Clark and Washoe counties and the cities of Las Vegas, Henderson, North Las Vegas, Reno and Sparks.
"Except as otherwise provided in this section, each governing body of a county whose population is 100,000 or more and each governing body of a city whose population is 60,000 or more shall adopt an ordinance that authorizes the development and use of an accessory dwelling unit on residential property."
Nevada Revised Statutes, NRS 278.257, subsection 1, added by AB 396 (2025), Statutes of Nevada 2025, Chapter 365: https://www.leg.state.nv.us/NRS/NRS-278.html#NRS278Sec257
An ordinance is a local law. Here is what the state law says those local rules can and cannot do.
Nevada's ADU law next to FHA's ADU rules
| Topic | Nevada law (NRS 278.257) | FHA rules (HUD Handbook 4000.1) |
|---|---|---|
| Kitchen | A local rule may not ban a separate kitchen in the ADU | A kitchen area is required: at least a sink with running water and a stove hookup |
| Renting it out | A local rule may not ban using the ADU as rental housing | Rent counts only if the appraiser finds it can be legally rented without restrictions |
| Short-term stays | A local rule may ban using the ADU as transient lodging | No hotel or short-term use; HUD-92561 bars rentals under 30 days |
| How many ADUs | The law does not require a city or county to allow more than two on one property | A one-unit home with a single ADU stays one unit |
| Parking and setbacks | No more than one extra parking space if existing and street parking meet the need; setbacks no stricter than for the main house | Not an FHA test; the appraiser checks zoning |
One date is worth knowing. Section 11 of AB 396 covers a county or city that had not adopted a matching ordinance before July 1, 2026. In that case, ADUs are allowed on any parcel zoned for residential use without restriction.
Which version applies to your lot depends on where it sits: unincorporated Clark County or a city like Las Vegas, Henderson or North Las Vegas. Check the current rules with that city or county before you buy. And keep in mind that a casita built before the new law still needs to fit the zoning and permit record the appraiser reads.
Can you rent the casita short term and still count it?
Short-term rent does not count for FHA. HUD bars hotel and transient use, meaning stays under 30 days, on a home with an ADU.
The rule comes through Form HUD-92561, the Borrower's Contract with Respect to Hotel and Transient Use of Property. HUD requires it for a one-unit home with an ADU. The form defines transient or hotel use as any rental for less than 30 days, or a rental with hotel services such as maid service. By signing it, you agree not to rent any part of the home that way while the FHA loan is in place.
The appraiser's rent also leaves out short-term rentals, as covered above. And Nevada's ADU law lets a city or county ban using an ADU as transient lodging.
So plan on a monthly tenant, with a lease of 30 days or more. FHA rules do not allow short-term rentals on a home with a casita. Some buyers with that goal look at investment property loans instead. Valley West Mortgage explains one type in its guide to DSCR loans after FHA in Las Vegas. A DSCR loan is a business-purpose loan for an investment property you will not live in as your main home. It qualifies the loan on the rent the property brings in. It is a different product with its own rules, and nothing here says it fits your situation.
Can you use FHA to build or fix up a casita?
FHA can help you add or fix up a casita through a Standard 203(k) loan, which rolls the cost of the work into your mortgage. HUD lists these as eligible work under the Standard 203(k):
- Adding an ADU that will be attached to the existing home.
- Renovating an existing ADU, attached or detached.
- Converting a one-family home into a home with an ADU.
The rent math is stricter on a 203(k). With no rental history, HUD has the lender count 50 percent of the lower of market rent or lease rent, not 75 percent. On the $1,400 casita above, that is $700 a month (illustrative only, not a quote, offer, or commitment to lend). Our guide to the FHA 203(k) renovation loan in Las Vegas explains how the program works.
Two more rules round this out:
- New homes. HUD lists a site-built one-unit home with an ADU as eligible for new construction financing. So is a manufactured home with an ADU. See our guide to FHA loans for new construction in Las Vegas.
- Cash-out refinances. A cash-out refinance is a new, larger loan that pays you part of your equity in cash. HUD says casita rent cannot be used to qualify for an FHA cash-out refinance. Our FHA cash-out refinance guide covers that loan.
How does casita rent compare with a duplex or a roommate?
Casita rent, duplex rent and roommate rent each follow a different FHA rule. This table sets them side by side.
| Rule | Home with a casita (ADU) | Duplex, you live in one side | Roommate in your house |
|---|---|---|---|
| Share of rent counted | 75 percent of the lower of market rent or lease | 75 percent of the lower of market rent or lease | Lower of the 12-month average or the current rent in the written agreement |
| Cap on the rent | No more than 30 percent of total qualifying income | No ADU cap | No more than 30 percent of total qualifying income (a separate boarder cap) |
| History needed | None | None | 12 months, with rent received in at least 9 of the last 12 |
| Reserves after closing | Two months of PITI, if the rent is used | Not set in the automated review; one month in a manual review | Not set in the automated review; one month in a manual review |
| Rent form | Form 1007 with the appraisal | Form 1025, the small income property appraisal | Tax returns or bank records, plus the written boarding agreement |
HUD calls a roommate a boarder. It says plainly that "a renter of an ADU is not a Boarder." So a casita tenant does not need the 12-month boarder history a roommate does.
What should a Las Vegas buyer looking at a casita do first?
A Las Vegas buyer looking at a home with a casita should first confirm the casita is a legal, rentable living unit. The rent math only matters after that.
- Look for the basics. Its own entrance, a full bathroom, and a kitchen area with a sink and a stove hookup.
- Check the permit record. Ask the seller for permits, and check the current ADU rules with the city or county the home sits in.
- Plan for a monthly tenant. Short-term stays under 30 days do not count, and you sign a form saying you will not rent it that way. If you rent the casita, federal and Nevada fair housing laws apply to how you choose and treat tenants.
- Run the numbers at 75 percent. Use the casita check above, and remember the 30 percent cap.
- Save for two months of reserves. If the casita rent helps you qualify, HUD asks for two months of house payments left after closing. The FHA home affordability checkup can help you test a budget.
- Ask about insurance for the casita and the tenant risk. A home with a rented unit may need different coverage than a home you live in alone, so ask any insurance agent you like about landlord coverage. Valley West Insurance is a separate licensed insurance agency affiliated with Valley West Mortgage, and its guide explains how landlord coverage works in Las Vegas (opens a separate website). You are free to choose any insurance provider, and you do not have to use Valley West Insurance, or any company affiliated with Valley West Mortgage, to get a loan from Valley West Mortgage.
Want the full FHA picture first? Start with the complete Nevada FHA loan guide. The Valley West Mortgage site also has the main FHA buyer page for Las Vegas.
The bottom line
A casita can help you qualify for an FHA loan in Las Vegas. HUD lets the lender count 75 percent of the lower of market rent or lease rent, capped at 30 percent of your total qualifying income.
The casita has to be a real living unit with its own entrance, a bathroom and a kitchen area. It has to be legally rentable, and it has to be rented month to month or longer, never short term. Plan on two months of reserves.
Bring the listing, any permits and any lease to your first call. Then see how a casita home could fit your FHA budget with a local loan officer.
Article history
- October 8, 2026 · Published. Built from HUD Handbook 4000.1, Update 18, last revised 8/12/2026. It was read as a PDF for the ADU, rent, reserves, 203(k), refinance, new home, short-stay and appraisal rules. Those rules were checked against HUD Mortgagee Letter 2023-17. The Nevada ADU rules came from NRS 278.257 and the enrolled text of AB 396 (2025).
Frequently asked questions
Can I use casita or ADU rent to qualify for an FHA loan?
It can be possible. HUD lets a lender count rent from one accessory dwelling unit, such as a casita, as income on an FHA purchase of a one-unit home.
The casita needs its own entrance, a bathroom and a kitchen area, and it must be legally rentable.
How much of the ADU rent does FHA count?
With no rental history on the home, HUD has the lender count 75 percent of the lower of the appraiser's market rent or the lease rent.
On a 203(k) renovation loan, the share is 50 percent.
What is the 30 percent cap on FHA ADU income?
HUD says rent from an ADU used to qualify must not exceed 30 percent of the total monthly income used to qualify you.
Put another way, the counted casita rent can be at most about 43 percent of your other income.
Do I need a tenant in the casita before closing?
Not always. HUD lets the lender consider rent from existing and prospective renters, and the lender can use the appraiser's market rent and any prospective lease.
Ask your lender what lease or rent proof it wants for your file.
Can I rent my casita on Airbnb with an FHA loan?
Not for short stays. Form HUD-92561, required for a one-unit home with an ADU, bars rentals for less than 30 days or with hotel services while the FHA loan is in place.
Short-term rent also does not count as qualifying income.
How many reserves do I need if casita rent helps me qualify?
HUD asks for reserves equal to two months of principal, interest, taxes and insurance after closing when ADU rent is used to qualify.
Reserves are savings left in your accounts after you close.
Does Nevada's ADU law let me build a casita in Las Vegas?
NRS 278.257, added by AB 396 and in effect July 1, 2026, requires Clark County and cities of 60,000 or more people to allow ADUs on single-family lots.
Local rules still apply, so check with the city or county where the home sits.
Sources
- ADU definition and one-unit status. HUD, Handbook 4000.1, Update 18, last revised 8/12/2026, section II.A.1.b.iv(B)(1) and (4), pages 170 to 171: hud.gov (read October 8, 2026)
- Minimum requirements for a living unit. HUD, Handbook 4000.1, Update 18, section II.A.3.a.ii(F), page 186: hud.gov (read October 8, 2026)
- Rental income from the subject property, 75 percent rule and 30 percent ADU cap. HUD, Handbook 4000.1, Update 18, section II.A.4.c.xii(I), pages 240 to 244, and manual twin II.A.5.b.xii(I), pages 319 to 323: hud.gov (read October 8, 2026)
- Reserves for a one-unit home with an ADU. HUD, Handbook 4000.1, Update 18, section II.A.4.d.i(C), page 253, and II.A.5.c.i(C), page 332: hud.gov (read October 8, 2026)
- Hotel and transient use, Form HUD-92561. HUD, Handbook 4000.1, Update 18, section II.A.1.b.iv(A)(4), page 168: hud.gov (read October 8, 2026)
- Form HUD-92561 text. HUD, Borrower's Contract with Respect to Hotel and Transient Use of Property, form HUD-92561 (2/2020): hud.gov (read October 8, 2026)
- 203(k) ADU rent and eligible ADU work. HUD, Handbook 4000.1, Update 18, section II.A.8.a.ii(A), page 391, and II.A.8.a.vi(A), page 394: hud.gov (read October 8, 2026)
- Cash-out refinance and new construction. HUD, Handbook 4000.1, Update 18, section II.A.8.d.v(A), page 436, and II.A.8.i.ii, page 466: hud.gov (read October 8, 2026)
- Appraiser ADU reporting and rent comparables. HUD, Handbook 4000.1, Update 18, section II.D.3.b.vii(E), pages 819 to 821, and II.D.3.c, page 822: hud.gov (read October 8, 2026)
- The 2023 ADU rule change. HUD, Mortgagee Letter 2023-17, Revisions to Rental Income Policies, Property Eligibility, and Appraisal Protocols for Accessory Dwelling Units, October 16, 2023: hud.gov (read October 8, 2026)
- Handbook index and updates. HUD, Single Family Housing Policy Handbook 4000.1 page: hud.gov (read October 8, 2026)
- Nevada ADU ordinance law. Nevada Revised Statutes, NRS 278.257: leg.state.nv.us (read October 8, 2026)
- AB 396 (2025), including section 11 and effective dates. Nevada Legislature, Assembly Bill 396, enrolled text, 83rd Session (2025): leg.state.nv.us (read October 8, 2026)
- AB 396 as enacted. Statutes of Nevada 2025, Chapter 365, approved June 6, 2025: leg.state.nv.us (read October 8, 2026)
More Nevada FHA guides. Each one covers a piece of buying a home with rental income: