Can I Buy a Duplex with an FHA Loan?
Yes, FHA loans can be used to purchase duplexes, triplexes, and fourplexes, as long as you occupy one of the units as your primary residence. This is one of the more accessible paths to owning a multi-unit property.
How It Works
FHA loans are available for properties with one to four units. You must live in one unit as your primary residence. The other units can be rented out.
Down Payment
FHA loans typically require a minimum down payment of 3.5% with a credit score of 580 or higher. On a duplex, this applies to the total purchase price, not just your unit. Duplex Buyer Guide.
Owner-Occupancy Requirement
Per HUD Handbook 4000.1, at least one borrower must occupy the property within 60 days of closing and must intend to continue occupancy for at least one year. This is a requirement of the loan program.
FHA Loan Limits
FHA loan limits vary by county and are updated annually. Multi-unit property limits are higher than single-unit limits. Verify the current limit for the specific county where the property is located before making any purchasing decisions.
Rental Income Consideration
Some lenders may allow a portion of projected rental income from the other units to be considered in your qualifying income. The specific percentage and documentation requirements vary by lender and program.
Self-Sufficiency Test
For three- and four-unit properties, additional FHA rental-income and property qualification requirements may apply beyond those for a duplex. These can include requirements tied to projected rental income and how the property itself qualifies for the loan. Because these requirements change, check the current rules with a lender experienced in FHA multi-unit transactions before making any purchasing decisions.
Important note: FHA loan requirements, limits, and program details change. Verify current terms with a licensed lender who handles multi-unit FHA transactions.
Disclaimer: This information is for educational purposes and does not constitute legal, tax, or financial advice. Loan programs, interest rates, guidelines, and requirements change over time. Consult a qualified lending professional for guidance specific to your situation.
Helpful Resources
Let's Talk About FHA Multi-Unit Financing
Buying a duplex with FHA financing involves specific requirements and considerations. Contact me to discuss whether this path makes sense for your situation.
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