What house hacking means
House hacking is buying a small multi-unit property, living in one unit, and renting out the others. Because you live there, the loan is treated as a primary residence, not an investment property. That means a much smaller down payment and better rates than a typical rental loan.
It's one of the most common ways people build a rental portfolio. After the occupancy period, you can move out, keep the property as a rental, and do it again.
Down payment options for 2-4 units
- VA loan: 0% down for eligible veterans and service members, on 1-4 unit properties you live in.
- FHA loan: 3.5% down on 1-4 unit properties you live in, with flexible credit guidelines.
- Conventional loan: as little as 5% down on 2-4 unit primary residences for qualifying buyers.
- Investment loan (not living there): usually 15% to 25% down.
Compare that to buying the same fourplex as a pure investment, where you'd typically need 25% down.
How rental income helps you qualify
Lenders can count a portion of the rent from the units you won't live in, usually about 75% of the current lease or the appraiser's market rent estimate. That income is added to yours, which can make a bigger property affordable.
FHA loans on 3-4 unit properties also have a self-sufficiency test: the property's net rental income has to roughly cover the full monthly payment. I'll run that math with you before you make an offer, so there are no surprises in underwriting.
Rules to know before you buy
- You generally need to move in within 60 days of closing and live there at least one year.
- Lenders usually require cash reserves after closing, often a few months of payments.
- The appraisal will include a rent schedule, and existing leases can be used if they're in place.
- Condition matters. FHA and VA appraisers look at health and safety items, so budget for repairs on older buildings.
Is a fourplex a good first home?
It can be, if you're comfortable being a landlord and the numbers work. The best deals are ones where rent covers a large share of the payment and the building doesn't need major work. I can help you compare a fourplex against a single-family home side by side, with real payments and real rent assumptions.
Common questions
Can I buy a fourplex with an FHA loan?
Yes. FHA loans allow 3.5% down on 1-4 unit properties as long as you live in one of the units. Properties with 3-4 units must also pass FHA's self-sufficiency test, where the net rental income covers the monthly payment.
Can I use a VA loan on a multi-unit property?
Yes. Eligible veterans and service members can buy a 1-4 unit property with 0% down using a VA loan, as long as they live in one of the units.
How much of the rent counts toward qualifying?
Most lenders count about 75% of the rent from the units you won't occupy, based on current leases or the appraiser's market rent estimate.
How long do I have to live in the property?
Owner-occupied loans generally require you to move in within 60 days of closing and live there for at least one year. After that, you can move out and keep it as a rental.
Want to run your numbers?
Text me your situation and I'll tell you which options fit. Most people hear back within a couple of hours during business hours.
This guide is general information, not a commitment to lend. Loan programs, limits, and guidelines change, and all loans are subject to credit approval and property eligibility.