Buying a 2-, 3-, or 4-plex to live in and have rent pay your mortgage

In October 2023 the Housing Affordability Index was at 103, its lowest point in over 20 years… indicating the median household income is just barely enough to qualify for the median-priced home.

The Housing Affordability Index measures housing affordability for the region. For example, the current index of 103 means the median household income earns 103% of what is necessary to qualify for the median-priced home under prevailing interest rates. Higher numbers mean greater affordability, so buyers don’t become ‘house poor’ just making house payments with not much left for anything else.

With housing affordability so low, some homebuyers are thinking creatively to make buying a home more affordable. One way is buying a duplex… or triplex.. or 4-plex and living in one unit and using rent from the other units to help pay the mortgage and build investment equity at the same time.


FHA vs Conventional

Until this week, you had to use FHA financing to get a low down payment of 3.5% on owner-occupied duplexes, triplexes and four-plexes… and they had the added requirement that the rent from all the units combined (including the owner-occupied one) had to be more than enough to cover the monthly mortgage payment. Problem is, rents haven’t risen as much as purchase prices so it has been very difficult to accomplish this. But things are changing to make buying with a low down payment possible.

Starting the week after November 18, 2023 it is possible to get a conventional home loan with only 5% down (instead of previous 15-25% down) for the purchase of owner-occupied duplexes, triplexes and four-plexes.

This not only makes home ownership more accessible, it also provides an opportunity to ‘try on’ property investment and being a landlord as you build equity. The maximum loan amount allowed for these 2-4 unit properties is set at $1,396,800, ensuring that larger and more expensive properties can be purchased with flexibility. 


In the frenzy of competition many buyers waived inspections the last few years following the pandemic.

Don’t. Waive. Inspections.

Don’t expect the property to be in perfect condition, but an inspection can also reveal hidden problems. A prime example is the 4-plex in the photo above. The sewer line from the house to the street was fine… BUT the water service line from the street to the house was too small, causing the water to stop flowing in the upper units when water was running in the basement laundry. This was discovered in the inspection, so it could be addressed as part of negotiations.

Sharlene Hensrud, RE/MAX Results –

Written By

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

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