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FHA Loans for 2-4 Unit Properties

Finance a Duplex, Triplex, or Fourplex with an FHA Loan
Low Down Payment - Low Interest Rates - Simple Processing.

FHA Loans for Multi-Family Properties – Duplex, Triplex, or Fourplex

Do you need a FHA for a loan for 2-4 unit property, such as a duplex, triplex, or fourplex?  On this page you can learn about some of the requirements to get an FHA loan for 2-4 unit properties.

FHA Loan Requirements for 2-4 Properties

Below are some of the basic requirements for purchasing a 2-4 unit property with an FHA loan:

  • Credit Score – To qualify for the 3.5% down payment, you must have a 580 credit score or higher. If your credit score is between a 500-579, you still may qualify for an FHA loan, but will be required to put 10% down.
  • Job History – Proof of employment for 2 years is required. It is ok if you have changed jobs, but you need to show consistent employment/income.
  • Financial Statements – You should expect to be required to provide your 2 most recent bank statements, pay stubs, and tax returns.
  • Debt-to-Income – You can not have a debt-to-income ratio higher than 43%.  However, if you have “compensating factors” you might be able to get approved with higher debt levels (a compensating factor could be more money in savings, longer job history, or great credit).
  • FHA Loan Limits – There are unique FHA loan limits which are set at the county level.  If you would like to view the loan limits for your county, you may do so on this page.  First select your state, and then your county, and the 2020 FHA limits for your location will appear.
  • Primary Residence – You must occupy the home that you intend to purchase and have it be your primary residence. FHA loans are not available to purchase an investment property, second home, or vacation home.
  • Mortgage Insurance – All FHA loans, regardless of the lender, require two types of mortgage insurance.  This includes the UPMIP (Upfront Mortgage Insurance Premium) and the regular MIP (Mortgage Insurance Premium).  FHA MIP acts similarly to how PMI (Private Mortgage Insurance) on a conventional loan acts.  You can use this FHA loan calculator to estimate your monthly payment and mortgage insurance costs.

Would you like to see if you qualify for an FHA loan?  We can help match you with a mortgage lender that offers FHA loans in your location.

Click here to get matched with an FHA lender

2020 FHA Loan Limits for 2-4 Unit Multifamily Homes

Some areas, which are known as “high cost areas” have significantly higher FHA loan limits.   There are high cost areas in most states, with many counties in some states, such as California, Hawaii, and Washington State.  

The “floor” FHA loan limits are shown below:

  • 1 unit  $331,760
  • 2 unit  $424,800
  • 3 unit  $513,450
  • 4 unit  $638,100

The “ceiling” FHA loan limits for high cost areas are shown below:

  • 1 unit  $765,600
  • 2 unit  $980,325
  • 3 unit  $1,184,925
  • 4 unit  $1,472,550

If you would like to view the 2020 FHA loan limits in your county, please use this FHA loan limits lookup tool.  First click on your state, and then select your county, and the FHA loan limits for your county will appear.

Would you like to see if you qualify for an FHA loan?  We can help match you with a mortgage lender that offers FHA loans in your location.

Click here to get matched with an FHA lender

Frequently Asked Questions

Can I buy an investment property with a FHA loan?
You may not purchase an actual investment property with an FHA loan.  However, you can collect rental income on any other units in the multifamily home.  You can not rent out all of the units though.  You must use one as your primary residence.

Can I use down payment assistance on a 2-4 unit property?
The majority of (if not all) down payment assistance programs will not be available for a multifamily home.  They are generally used for single family residences.  They are also only available to lower and middle income households.

Do FHA loans allow you to cosign with a non-spouse, such as a friend or business partner?
Yes, you can cosign with anyone you want with FHA-insured loans. They are not limited to married couples or significant others. Many who purchase a home with a FHA loan are friends, associates, or relatives.

 

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