How to buy a duplex, triplex, or quadplex with an FHA loan.

How To Buy a Duplex, Triplex, or Fourplex With an FHA Loan

Many people wonder if they can use an FHA loan to get their feet wet as a landlord, earn rental income, reduce primary residence expenses, and start investing in real estate.

The answer is a resounding “yes.”

FHA loans allow you to buy a duplex, triplex, or four-plex (2-4 unit) property as long as you live in one unit. You can rent out the remaining units.

And for the most part, the same FHA lending rules apply for multi-unit properties as for single-family residences.

Ready to become a homeowner and investor at the same time? Here’s how.

Check your FHA multifamily homebuying eligibility.

In this article:

Buying a Duplex, Triplex, or Fourplex with FHA

Buying a multifamily property is similar to buying any other property with some additional steps.

  1. Get pre-approved by an FHA lender
  2. Hire a realtor experienced in multifamily homes
  3. Find a duplex, triplex, or fourplex in your price range
  4. For a triplex or four-plex, conduct the FHA self-sufficiency test
  5. Ensure there’s strong demand for rentals in the area
  6. Make an offer
  7. Depending on the market, ask for a seller credit for closing cost assistance
  8. Receive an accepted offer
  9. Request lease agreements from the seller
  10. Send to the lender the purchase contract and lease agreements
  11. The lender orders an appraisal including market rent estimates
  12. Your file is sent to underwriting
  13. You will be asked for additional items, called “conditions”
  14. Send in all conditions
  15. Receive final approval
  16. Sign closing docs
  17. Get the keys, move in, and rent out any non-rented units
  18. Get new leases from existing tenants showing you as the landlord

Advantages of buying a multi-unit home versus single-family

Buying a duplex or other multi-unit home comes with clear advantages. You essentially buy a home – even your first home – and have a tenant help you pay your mortgage. 

This potentially reduces your monthly cost, even though the duplex often comes with a higher purchase price. 

FHA Single FamilyFHA Duplex
Upfront Costs
Home price$400,000$550,000
Down payment$14,000$19,250
Closing costs$8,000$9,000
Total upfront cost$22,000$28,250
Monthly Costs
Principal/Interest payment$2,377$3,267
Mortgage insurance$278$383
Rental income-$0-$1,800
Total monthly cost$3,035$2,350
All costs are estimates and for example purposes only.

You also become a homeowner and a real estate investor with one home purchase. After one year, you can move out of the home and rent out both units, amplifying your investing efforts.

See if you can buy a multiunit home with FHA.

Disadvantages of buying a duplex

Buying a 2-, 3-, or 4-unit property comes with drawbacks as well.

  • Higher upfront cost: You’ll need a bigger down payment and more for closing costs to buy a multi-unit home
  • Payment risk: If you can’t rent one unit, you’ll pay more each month without supplemental rental income
  • Liability: Whenever you rent real estate to someone, you are at greater risk of lawsuits
  • Landlord learning curve: There’s a lot to learn, from maintenance to tenant laws to screening. Learn as much as you can prior to purchasing a duplex
  • Harder to sell: It could be harder to sell someday, especially in a down market. Not as many people are looking to buy a duplex as a single-family residence

As with anything worthwhile, there are greater costs and risks. But in a few years, there’s little doubt you will regret your decision.

Related: Multifamily vs Single-Family FHA Calculator

General FHA guidelines

Here are the criteria you’ll need to meet to qualify for any FHA loan including for a multi-family property.

Credit Score580+
Down payment3.5%
OccupancyLive in one unit
First-time buyerNot required
Debt-to-income ratioBelow 56.9%
Property type1-4 legal units
Max loan limits$472k-$2M+ based on # of units and location
Property conditionMust meet HUD quality guidelines

Using rental income to qualify – 2023 guidelines

Perhaps the biggest benefit to buying a multi-unit home is that you can use future proposed rent to qualify

Yes, you can use rental income that you are not even receiving yet. FHA assumes you can rent the units, based on 75% of either the current market rent (if vacant), or 75% of actual rent (if currently rented). 

Example: FHA Duplex Rental Income
Duplex price$400,000
Total payment$3,000
Income needed to qualify$7,500/mo
Employment income$6,500/mo
ResultDoes not qualify
Rental income on 1 unit$1,800
Rental income after 75% vacancy factor$1,350
New total qualifying income (wages + rent)$7,850
ResultMay qualify

In this example, rental income may have pushed this applicant from “denied” to “approved.” This is the power of buying a 2-, 3-, or 4-unit home with FHA.

How much rental income can I use to qualify?

Since this is a home you’re buying, you may not have any rental history for the property except perhaps current leases.

If you have leases, provide them to the lender. You can use these to prove future rent.

If not, the lender will order a comparable rent schedule along with the property appraisal. The appraiser will provide market rent estimates for each unit.

You can use the lesser of:

  • Income based on a profit and loss statement supplied by the appraiser (Fannie Mae Form 216 or Freddie Mac Form 998); or
  • 75% of the fair market rents (Fannie Mae 1025/Freddi Mac 72) or actual rents, whichever is lower.

For example, if the appraiser says a unit could rent for $1,000 per month and would also make this much based on operating expenses. But it’s currently rented at $800. You can use 75% of $800 to qualify, or $600.

Related: FHA Rental Income Guidelines: Use Future Rent to Qualify.

FHA self-sufficiency test for 3- and 4-unit properties

FHA recently imposed an additional rule for properties with 3-4 units called the FHA self-sufficiency test. Fortunately, this guideline does not apply to duplexes.

But if you’re shopping for a 3- or 4-unit home and plan to use FHA, make sure it will pass the test before making an offer.

In short, the FHA self-sufficiency test determines whether rent from all units will cover the full payment.

Run this FHA self-sufficiency test calculator if you’re considering a 3 or 4-unit property.

Another rule for 3-4 unit properties: you must have cash reserves after the down payment and closing costs equal to three months of the full payment. Reserves can’t come from a gift.

FHA duplex loan limits

FHA offers higher loan limits when you’re buying a 2-4 unit property. The reason is that multi-unit homes usually cost more than single-family residences.

For 2023, FHA loan limits are as follows

Home typeMost areasHigh-cost areas

Many areas have limits between the low and high numbers listed above. Also, Alaska and Hawaii offer even higher limits of roughly $2 million to $3.1 million for 2-4 unit properties. To check your exact limit, use HUD’s FHA loan limit lookup.

Be careful when searching for a duplex, triplex, or four-plex.

Sometimes, the owner creates an “unofficial” additional unit. They might install a sink and a bathroom in the basement and try to sell the home as a duplex.

A true multi-unit should have the following characteristics:

  • If a single-family residence was converted, ensure proper permits were obtained
  • The county shows the property as a multi-unit in public records
  • Each unit has its own utility meters
  • Each unit has its own entrance
  • Zoning allows for multi-unit homes

Ideally, the home was built from the ground up as a multi-unit. These homes typically have great layouts and equally-distributed square footage.

Conversions, though, often have strange entrances and floorplans that could be harder to rent. However, multi-units that were once single-family homes are quite common in densely populated urban areas. As long as all the units were legally converted and the home is typical for the area, owning one of these properties should be no problem.

Keep in mind that FHA will not allow you to qualify with rental income on a legal 1-unit property. That’s essentially trying to use roommate or boarder income, which FHA does not allow. However, some programs like Freddie Mac Home Possible allow roommate income, so consider non-FHA options for a “multiunit” that’s really a 1-unit home.

Other ways to finance a multifamily property

Conventional loan: You can also house hack using a conventional loan. However, you’ll need 15-25% down depending on the number of units.

VA loan: This is likely the best way to get into investing because you can buy a home up to 4 units with zero down. Only those with current or former eligible U.S. military service can use it.

Non-QM: These are specialty loans that are outside of traditional lending standards. Because they require large down payments and come with prepayment penalties and other “gotchas”, they are for savvy investors, not newer house hacking buyers.

Seller financing: In rare cases, the seller may be able to “carry the loan.” This means they agree to become the mortgage holder and you make payments to them. If you find a property that no one else wants, you may be able to convince the seller to become your lender.

FHA loan duplex, triplex, and four-plex FAQ

Is buying a duplex harder than buying a single-family home?

Buying a duplex is harder in some ways and easier in others. It will probably cost more. You’ll need to verify rental income. It could be harder to find a duplex to buy as well. However, it’s easier in that you can use rental income to qualify and loan limits are higher for 2-, 3-, and 4-unit properties.

What are the risks of buying a duplex?

You’ll have a larger monthly payment, so if you don’t rent one unit, it could strain your budget. You’ll also need to know state and local tenant laws or hire a property management company to avoid lawsuits. Because the rewards are greater when buying a duplex, so are the risks.

What loan types can I use to buy a duplex?

Conventional, VA, and FHA loans allow you to buy 2-4 unit properties. For VA and FHA, you must live in one unit. Most conventional loans allow you to live in one unit or buy it as an investment property and rent all units, but the down payment minimum is 15-25% compared to 3.5% for FHA and 0% for VA.

Can you buy a triplex with an FHA loan?

Yes. FHA allows loans on 1-4 unit properties. A triplex is a fantastic use of a 3.5%-down FHA loan.

What’s an FHA loan 4 plex?

This likely refers to a 4-unit (fourplex or quad) financed with FHA. Homes up to 4 units are considered residential and can be financed with a regular FHA loan, even for first-time buyers.

Start your real estate investment journey with FHA

FHA could be the best way to start as a real estate investor. With just 3.5% down and low rates,  it sure beats buying a separate rental property. 

And, you could have an easier time qualifying thanks to the rental income.

Contact a lender and make the first step by getting pre-qualified for an FHA multi-family loan.

Start your FHA multiunit home purchase.


  • Tim Lucas

    Tim Lucas spent 11 years in the mortgage industry helping hundreds of mortgage clients from all walks of life, from first-time buyers to those buying multi-million dollar homes. He purchased his first home at 26 with just $1,100 out-of-pocket and now owns real estate worth $2.4 million. Tim was the managing editor at national websites,, and He combines hands-on experience with his editing background to bring unfiltered truth about mortgage topics. Tim has been featured in publications such as Time, U.S. News, MSN, and more. Connect with Tim on LinkedIn and Twitter.

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