5% down on a fourplex

6 Replies

HI! I am new to investing and want to get some input on a strategy that my experienced real estate investor friend told me about. 

Is it possible to get a an FHA loan on a fourplex? It is my understanding that with an FHA loan, the buyer can put as little as 5% down and in some cases even lower. If I am planning on living in one of the units, is this something that is possible? If so, what steps are needed to get there? What is a conservative dollar amount that I should I have in savings for a deal like this?


Thanks!

You are correct. 5% or less for FHA home. A couple things to keep in mind. It has to be owner occupied for a minimum of 1 year. You need to show that you will be moving into the unit at closing by showing an empty unit (you don't physically need to show anyone, but as part of the discussions with the banks, they may want to see the leases and see that someone is at the end of their lease and will not be renewing). 4 units is the max for FHA, 5 and up is investor. AKA - 20% down. Another thing to keep in mind if you want to grow your portfolio is that you can only have 1 FHA at a time. So if you want to purchase another home in a year or 2, you will need to refi out of the FHA and then it's possible to purchase another home for 5% or less down.

Hope this is helpful!  Good luck! 

Nice job finding the 4plex! This process is known to investors as "House Hacking," so just searching that on BP or Google will give you a treasure trove of information.

From what I've read, as of today FHA loans go for as little as 3.5%. They are insured by the gov't and one thing to keep in mind is you'll have to pay for that insurance every month. Good luck on everything and let me know how it goes!

Tyler, this is the strategy I used to purchase my Triplex in Phoenix earlier this year.

Depending where you are in Phoenix you should budget somewhere around $10,000-$30,000


If you have not found a realtor I would highly recommend Ryan Swan for the Phoenix market. I closed on my first triplex in Phoenix while working with him, as a new investor/first time home buyer, he was very helpful and knowledgeable. He can also get you in touch with a lender to give you more accurate dollars. 

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