How To Buy A Multi Family 2-4 Units Owner Occupied Property With 3.5% Down Fha Home Loan

New Home Buyers should consider buying Owner Occupied Multi Family (2-4 units) with an FHA Loan. For discussion purposes the  following suggestions/assumptions are made in this article.

  • The Duplex/Triplex/Four Plex will be owner occupied for primary residence
  • This means one of the units needs to be occupied by the borrower.
  • Credit score assumed is over 620 + Fico

75% of the rent is added to borrowers income when calculating the loan qualification.This means you are now benefitting with the rental income to qualify for a larger loan.  The down payment needed is still 3.5% .Closing costs credits can be paid by seller upto 6%.Collections/chargeoffs may be OK as long as FICO is over 620 and Desktop underwriter approves the file.Please read other articles on FHA Home Loan Income calculation,FHA Home Loan credit requirements and calculating  FHA Home Loan front and backend ratio on our web site.  Example :  Property : Four Plex  Rent from Units :

  • Unit1: owner Occupied
  • Unit 2:$800
  • Unit 3:$700
  • Unit 4:$600

Borrowers Income: $48000 per annum  Borrower Monthly Debt

  • Monthly Auto Loan Payment :$250
  • Minimum Monthly Credit card Pmt $150

Borrower FICO: 620  Down Payment:3.5%
Qualified Purchase Price :$320000. 
So with a 3.5% down payment a borrower can qualify to purchase a 4 plex worth $320000.. 


This is an excellent way to build residual income for retirement. After the loan is paid off the rental income is for you to keep.As the years go by the rental income will keep rising and the loan will keep reducing to a point where you just have the income with no mortgage to pay.

We write articles covering a wide range of topics ,on a regular basis , on Loan Qualification  for FHA Home Loan,VA Mortgage Loans,USDA Home Loans and Conventional Home Loans.The articles are available on our website and provides a  Proprietory Affordability Calculator. It matches your profile against the programs our lenders offer  and instantly communicates the PreQual amount and the Purchase price you are eligible for.

Access the PreQual affordability calculator now for FHA Home Loan

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