Lender told me minimum 15% down for duplex, 25% down for 3-4-plex

[Emily Donahue]

I'm new to real estate investing and would like to start by buying a 2/3/4-plex and living in it while renting out the other units. I got in touch with a local lender who told me that loans for duplexes require 15% down and loans for triplexes and four-plexes require 25% down. I don't want to put that much down, since I expect maintenance and closing costs in the first year. However, I've heard of people getting FHA loans with very little down on multifamily properties. Is my lender full of it or is there something I'm missing?

[Jerry Padilla]

@Emily Donahue

Those are the down payment requirements for an owner occupied conventional loan. FHA is a route you can go, if you don't already have an FHA mortgage and plan to house hack. If you already have an owner occupied single family home, you will have to convince an underwriter why you are going from a single family residence to a multi-family residence. A rationale that won't go over well, is to accumulate rental property. You can get up to a 4 unit property with only 3.5% down with FHA. It is a great route to go to purchase your first primary home.