House hacking means buying a building with 2 to 4 units, living in one and renting the others so the tenants help pay the mortgage. FHA is the strongest program for it. You put down the same 3.5% you'd put down on a single-family home, the loan limit climbs with each unit, and the rent from the other units counts as income on your application. The duplex math comes first below, then the extra test FHA adds once you step up to three or four units.
The FHA rules for 2 to 4 unit homes
Everything from a regular FHA loan carries over. You need a 580 credit score for 3.5% down (500 to 579 with 10% down), your debt-to-income has to fit FHA's ratios, and you pay 1.75% upfront mortgage insurance (MIP) plus annual MIP. The FHA loan requirements guide covers those in full.
Unit count changes less than people expect:
| 2 units | 3 units | 4 units | |
|---|---|---|---|
| Down payment at 580+ | 3.5% | 3.5% | 3.5% |
| Rent from the other units counted | 75% | 75% | 75% |
| Self-sufficiency test | No | Yes | Yes |
| Reserves after closing | None with an automated approval | 3 months of payments | 3 months of payments |
The occupancy rule is the same as any FHA loan. At least one borrower moves into one of the units within 60 days of closing and lives there for at least a year.
FHA loan limits by number of units
The limit rises with each unit, which is what makes a fourplex reachable with 3.5% down.
| Units | Lowest-cost areas (2026) | Highest-cost areas (2026) |
|---|---|---|
| 2 units | $693,050 | $1,599,375 |
| 3 units | $837,700 | $1,933,200 |
| 4 units | $1,041,125 | $2,402,625 |
South Florida's limits sit above the floor. Check any county with the loan limits tool.
How rent from the other units helps you qualify
When you don't already have a rental history on the building, FHA counts 75% of the lesser of two numbers for each unit you'll rent out: the appraiser's fair market rent or the rent in the lease. The appraiser estimates that rent on a small residential income property appraisal, which compares the building to similar rentals nearby. The 25% haircut covers vacancies and upkeep.
That 75% gets added to your gross monthly income. Your full mortgage payment, meaning PITI plus MIP (principal, interest, property taxes, homeowners insurance and the monthly mortgage insurance premium), counts as your housing payment. Your debt-to-income ratio (DTI) is then figured on the bigger income number, the same way the DTI calculator does it. With an automated approval, FHA allows about 46.9% for housing and 56.9% total, and those are the limits QualRate uses.
The unit you live in doesn't produce income for you on the application. Only the units you'll rent count.
A $550,000 duplex in Broward
Run this duplex at the 5.75% 30-year fixed rate, with property taxes at about 0.95% of the price and insurance of $450 a month. The second unit rents for $2,300.
- Price: $550,000
- Down payment (3.5%): $19,250
- Base loan (96.5%): $530,750
- Upfront MIP (1.75%, added to the loan): $9,288.13
- Total loan: $540,038.13
| Monthly payment piece | Amount |
|---|---|
| Principal and interest | $3,151.52 |
| Annual MIP (0.55% of $530,750, divided by 12) | $243.26 |
| Property taxes | $435.42 |
| Insurance | $450.00 |
| Total housing payment | $4,280.20 |
The buyer earns $7,500 a month and has a $350 car payment.
| Without the rent | With 75% of the rent | |
|---|---|---|
| Income used | $7,500.00 | $7,500 + $1,725 = $9,225.00 |
| Housing ratio | 57.07% | 46.40% |
| Total ratio | 61.74% | 50.19% |
| Within FHA's 46.9% / 56.9%? | No | Yes |
The $1,725 is 75% of the $2,300 rent. Without it, this buyer's housing ratio is 57.07% and the deal doesn't work. With it, the housing ratio drops to 46.40% and the total ratio to 50.19%, both inside FHA's limits. The tenant is effectively qualifying the buyer for a $550,000 building on a $90,000 salary.
Plug in your own building, rents and income with the house hacking calculator.
Before you write an offer on a specific duplex, call AAA Capital Funding at 888-601-8344 and we'll check the rent, the payment and the ratios with you.
Triplexes and fourplexes: the self-sufficiency test
On 3 and 4 unit buildings, FHA adds a test that ignores your personal income entirely. The building has to carry itself.
The rule: take the appraiser's fair market rent for every unit, including the one you'll live in, and subtract 25% (or the appraiser's vacancy factor if it's higher). FHA calls what's left the net self-sufficiency rental income. Your full monthly payment (PITI plus MIP, plus HOA dues if any) divided by that number can't be more than 100%. In plain terms, 75% of the total rent has to cover the whole payment.
Running the test on an $800,000 fourplex
Four units, each with a fair market rent of $2,200, at 5.75%, 0.95% taxes and $700 a month for insurance.
- Base loan (96.5%): $772,000
- Upfront MIP (1.75%): $13,510
- Total loan: $785,510
Because the base loan is above $726,200, the annual MIP is 0.75% instead of 0.55%.
| Monthly payment piece | Amount |
|---|---|
| Principal and interest | $4,584.02 |
| Annual MIP (0.75% of $772,000, divided by 12) | $482.50 |
| Property taxes | $633.33 |
| Insurance | $700.00 |
| Total payment | $6,399.85 |
Total rent is 4 times $2,200, or $8,800. Seventy-five percent of that is $6,600. The payment of $6,399.85 is 96.97% of $6,600, so the building passes.
If those units rented for $2,100 instead, 75% of $8,400 is $6,300, which falls $99.85 short of the payment. The fourplex would fail at $800,000, and no amount of personal income fixes it. At $2,100 rents the price would need to come down to about $785,000 for the numbers to pass.
The buyer still has to qualify on DTI as well. On this fourplex the income side is the buyer's own pay plus 75% of the three rented units ($4,950). To keep the housing ratio at 46.9%, total income has to reach $13,645.74, so the buyer needs about $8,696 a month of their own income.
Reserves on 3 and 4 units
FHA requires 3 months of the full mortgage payment left in your accounts after closing on a triplex or fourplex. On the fourplex above that's 3 times $6,399.85, or $19,199.55. Reserves are money you keep; they aren't spent at closing. Checking, savings and money market balances all count. On a duplex FHA doesn't set a minimum reserve with an automated approval.
The co-signer rule on 2 to 4 units
A co-signer is normally the first fix when income runs short, and on a single-family FHA home a parent or grandparent can co-sign at the full 96.5%. On a 2 to 4 unit home, FHA caps the loan at 75% of the value when one of the borrowers won't live there. That means 25% down, which defeats the point for most house hackers. If you need help on income, a co-signer works best on a single-family home, or the rent on a duplex may close the gap by itself, as it did in the example above.
The Conventional option: 5% down on 2 to 4 units
Fannie Mae allows 5% down on a 2 to 4 unit home you'll live in, as long as the loan stays at or under the baseline conforming limit ($1,066,250 for two units, $1,288,800 for three, $1,601,750 for four). Above that baseline, in high-cost areas, the minimum down payment is larger.
| Duplex at $550,000 | FHA | Conventional |
|---|---|---|
| Minimum credit score | 580 for 3.5% down | 620 at most lenders, AAA included |
| Down payment | $19,250 (3.5%) | $27,500 (5%) |
| Mortgage insurance | 1.75% upfront plus annual MIP | Monthly PMI, no upfront charge |
| Mortgage insurance removal | Stays unless you refinance or sell | Can come off once you reach 20% equity |
| Rent counted | 75%, no landlord history needed | 75%, but limited for first-time landlords |
| Total DTI | About 56.9% | Up to 50% |
| Reserves QualRate models | None on 2 units, 3 months on 3 and 4 | 6 months |
Conventional private mortgage insurance (PMI) is priced on your credit score, so it costs the most near 620 and the least at 760 and up. A buyer with a strong score and cash for the extra 1.5% down can come out ahead on Conventional. For most first-time house hackers, FHA's lower score floor, smaller down payment and higher DTI limit make it the easier approval. Fannie Mae also limits how much rent helps you qualify if you've never managed a rental, while FHA counts it from day one.
Picking the right building
The best house hack is the building where the rents carry most of the payment. A few checks before you make an offer:
- Get the real market rent for each unit, not the seller's projected number. The appraiser's rent estimate is what the lender uses.
- On a triplex or fourplex, run the self-sufficiency test first. It's the one rule your income can't fix.
- Price insurance early. Florida insurance on an older multifamily building can swing the payment by hundreds of dollars a month.
- Keep the base loan under $726,200 when you can, since that keeps the annual MIP at 0.55% instead of 0.75%.
If you've found a 2 to 4 unit property or you're deciding between FHA and Conventional on one, call AAA Capital Funding at 888-601-8344. We'll go through the rents, the self-sufficiency test and both programs on that building with you.