Multi-Family Property Mortgage 2026: How to Buy a Duplex, Triplex or Fourplex
House hacking is the #1 wealth-building strategy for 2026. Buy a duplex with FHA 3.5% down ($17,500 on $500K), live in one unit, rent the other for $1,800/month — your net housing cost drops to $2,110/month (vs $3,800 renting). VA loans offer 0% down for veterans. This complete guide covers financing, cash flow analysis, and 6 loan options for 2-4 unit properties.
House Hack Example: $500K Duplex (FHA 3.5% Down)
Your Costs:
- Purchase Price: $500,000
- Down Payment (3.5%): $17,500
- Monthly P&I: $2,970
- Taxes + Insurance + MIP: $940
- Total Payment: $3,910/month
Your Income:
- Rental Income (Unit 2): $1,800/month
- Your Net Housing Cost: $2,110/month
- You Save: $1,690/month vs renting alone
- Annual Savings: $20,280
With a triplex or fourplex, you could potentially live for FREE or even cash-flow positive from day one.
6 Ways to Finance a Multi-Family Property (2026)
| Loan Type | Down Payment | Credit | Units | Rates | Best For |
|---|---|---|---|---|---|
| FHA (Owner-Occupied) | 3.5% | 580+ | 2-4 | 5.85-6.50% | First-time house hackers |
| Conventional (Owner) | 5-15% | 620+ | 2-4 | 6.00-6.75% | Good credit, more equity |
| VA Loan (Veterans) | 0% | 580+ | 2-4 | 5.50-6.25% | Veterans/active military |
| Conventional (Investor) | 15-25% | 680+ | 2-4 | 6.50-7.50% | Pure investment buyers |
| DSCR Loan | 20-25% | 660+ | 2-4+ | 7.00-8.50% | Self-employed investors |
| Portfolio Loan | 20-30% | 680+ | 5+ | 7.00-9.00% | Experienced investors, 5+ units |
Ready to Buy a Multi-Family Property?
Get pre-approved for a 2-4 unit property. Compare FHA, VA, and conventional rates from 50+ lenders.
Get Multi-Family Pre-ApprovalWhat is House Hacking? (The #1 Wealth-Building Strategy)
House hacking means buying a multi-unit property, living in one unit, and renting out the others. This strategy lets you:
- Use owner-occupied financing (3.5% FHA vs 15-25% investor down payment)
- Reduce or eliminate your housing cost — tenants pay your mortgage
- Build equity while living for free or near-free
- Learn to be a landlord with tenants literally next door
- Scale faster — save aggressively and buy another property in 1-2 years
FHA Multi-Family: The Best Entry Point
FHA is the most popular loan for house hacking because of the ultra-low 3.5% down payment:
FHA Multi-Family Requirements:
- • Down payment: 3.5% with 580+ credit score
- • Occupancy: Must live in one unit for 12+ months
- • Self-sufficiency test: For 3-4 units, rent from all units must cover mortgage (75% of projected rent vs. PITI)
- • 2026 FHA limits: 2-unit $671,200 | 3-unit $811,275 | 4-unit $1,008,300 (floor)
- • Rental income: 75% of projected rent counts toward qualifying
- • MIP: 1.75% upfront + 0.55% annual (required for life of loan if <10% down)
VA Multi-Family: 0% Down for Veterans
Veterans and active-duty military can buy a 2-4 unit property with $0 down using a VA loan:
VA Multi-Family Advantages:
- • Down payment: 0% (zero down!)
- • No PMI/MIP: Save $200-$400/month
- • Lowest rates: 5.50-6.25% (0.25-0.50% lower than conventional)
- • Occupancy: Must live in one unit within 60 days
- • Funding fee: 2.15% first use (can be financed)
Learn more: VA Loan Complete Guide 2026
Cash Flow Analysis: How to Know if a Deal Works
The 1% Rule is a quick way to evaluate multi-family deals: monthly rent should be at least 1% of purchase price.
| Property | Price | Total Rent | 1% Test | Monthly Cash Flow* | Cap Rate |
|---|---|---|---|---|---|
| Duplex (Midwest) | $250,000 | $2,800/mo | 1.12% ✅ | +$450 | 7.2% |
| Triplex (Southeast) | $400,000 | $4,200/mo | 1.05% ✅ | +$380 | 6.5% |
| Fourplex (Texas) | $550,000 | $5,600/mo | 1.02% ✅ | +$520 | 6.1% |
| Duplex (Coastal CA) | $900,000 | $5,400/mo | 0.60% ❌ | -$1,200 | 3.2% |
*Cash flow after mortgage, taxes, insurance, vacancy (5%), maintenance (10%), and management (8%).
5 Steps to Buy Your First Multi-Family Property
- Get pre-approved for a multi-unit loan. Tell your lender you want 2-4 unit FHA or VA. Compare multi-family rates from 50+ lenders.
- Analyze deals using the 1% rule. Monthly rent should be 1%+ of purchase price. Run full cash flow analysis before offering.
- Get a property inspection. Multi-family homes have more systems to inspect — HVAC, plumbing, electrical for each unit.
- Screen tenants carefully. If buying occupied units, review existing leases. For vacant units, screen for credit, income (3x rent), and rental history.
- Build reserves. Keep 3-6 months of expenses in reserve for vacancies, repairs, and unexpected costs.
Frequently Asked Questions
Can I buy a duplex with an FHA loan?
Yes! FHA loans allow you to buy a 2-4 unit property with just 3.5% down as long as you live in one unit as your primary residence. On a $500K duplex, that is only $17,500 down. The rental income from the other unit(s) can be counted toward your qualifying income.
How much down payment do I need for a multi-family property?
Down payment varies by loan type and occupancy: Owner-occupied FHA: 3.5% down. Owner-occupied conventional: 5-15% down. Owner-occupied VA: 0% down. Investment (non-owner): 15-25% down conventional, 20-25% for 3-4 units. House hacking with FHA is the lowest entry point.
What is house hacking and how does it work?
House hacking means buying a multi-unit property, living in one unit, and renting out the others. With a duplex at $2,800/month mortgage, if the other unit rents for $1,800/month, your net housing cost is only $1,000/month. Many house hackers live for free or even profit from day one.
Can I use rental income to qualify for a multi-family mortgage?
Yes. Most lenders allow 75% of projected rental income to count toward your qualifying income. For a triplex with two rental units at $1,500 each, lenders count $2,250/month ($3,000 x 75%) as additional income. This significantly boosts your purchasing power.
What are the FHA loan limits for multi-family properties in 2026?
FHA 2026 limits for multi-family: 2-unit: $671,200-$1,599,525. 3-unit: $811,275-$1,933,425. 4-unit: $1,008,300-$2,402,175. Limits vary by county. High-cost areas (NYC, SF, LA) use ceiling limits. Most areas use floor limits.
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