HVAC and water heating equipment consume up to 47% of the total energy consumption in U.S. households. Electric heating and cooling are important contributors to peak electricity demand and water heating also plays a large role in energy expenditures. The development of a residential fuel fired multifunction heat pump that achieves high source energy efficiency for space conditioning and water heating would reduce overall primary energy use for space heating, space cooling, and water heating. The proposed technology (cooling source COP of 1.3, heating source COP of 1.4 and over 30% primary energy usage reduction) results in a significant increase in efficiency compared to present HVAC and water heating equipment. A prototype Fuel Fired Multi-Function Heat Pump (FFMHP) unit is being tested in our laboratory. In the space heating mode, we use a suction line heat exchanger to recover the engine heat. In the space cooling mode, we utilize the recovered engine heat to heat water. The FFMHP is modeled using a component-based modeling approach. We have parametric runs to show the performance trends with varying multiple operation parameters.