12/31/2025
Ever dreamed of owning a multi-family property and having tenants help pay your mortgage? It's a fantastic way to build wealth, but choosing the right loan is key!
The biggest difference often comes down to the down payment. FHA loans let you get into a 2-4 unit property with as little as 3.5% down if you plan to live in one unit. Conventional loans require a much larger 15-25% down for multi-family homes. For example, on a $400,000 duplex, that could be $14,000 with FHA versus $60,000 with Conventional!
Both FHA and Conventional loans allow you to use projected rental income from other units to help you qualify for the mortgage, which can significantly boost your purchasing power.
However, FHA loans come with stricter property condition requirements and a "self-sufficiency test" for 3-4 unit properties that can be a hurdle. Also, FHA mortgage insurance typically lasts the life of the loan. Conventional loans, while needing a larger down payment, offer the benefit of removing private mortgage insurance (PMI) once you build enough equity, saving you money in the long run.
Considering buying a multi-family property? What's your biggest question about FHA versus Conventional loans? Share your thoughts below!
