Investment properties and multi family

[Dominick Preyer]

Hi everyone, I've been out the loop for a couple years but was wondering about a law that I believe passed a couple years back about multi family units 4 and under, investors were able to put 5% down. 

Can someone with this knowledge please weigh in and let me know if this is true and if it's country wide or only in certain states? 

Thank you. 

[Michael Dumler]

@Dominick Preyer, To clarify, there isn’t a specific “law” that allows investors to put 5% down on small multifamily properties. However, as others have mentioned, if the borrower plans to occupy one of the units as their primary residence, there are financing options that allow as little as 5% down on 2–4 unit properties.

Fannie Mae updated their guidelines in late 2023 to allow for 5% down owner-occupied financing on small multifamily. Before that, 15–25% down was the norm—even for house hackers. Just to reiterate: to qualify for the 5% down option, you must live in one of the units. This isn’t available for non-owner-occupied purchases.

It's a common strategy if you're looking to get into a small multifamily deal with relatively low capital with the intent to house hack. There's also potential to rinse and repeat down the line, depending on whether you still qualify based on income, DTI, and reserve requirements.