Investor · SF Bay Area · Member since 2020 · 6 posts · 1 vote
Can I use an FHA loan for a multi-unit property? I would say specifically in CA. I've heard 4+ is considered commercial so I'm not sure if it would have to be considered an investment property.
Hey Jonathan, you can get a FHA loan on a 1-4 unit property. FHA loans are great because no matter if it is 1 or 4 units, the minimum down payment is 3.5%. Being a FHA loan, you will need to move into the property. When you sign the closing papers, you are agreeing that you plan to live in the property for at least a year. You can also only have one FHA loan at a time. Also, the more units the larger the max loan amount you are allowed to have on the property. Anything over 4 units is going to be a commercial loan which will be completely different.
Hey Jonathan, you can get a FHA loan on a 1-4 unit property. FHA loans are great because no matter if it is 1 or 4 units, the minimum down payment is 3.5%. Being a FHA loan, you will need to move into the property. When you sign the closing papers, you are agreeing that you plan to live in the property for at least a year. You can also only have one FHA loan at a time. Also, the more units the larger the max loan amount you are allowed to have on the property. Anything over 4 units is going to be a commercial loan which will be completely different.
Investor · Pittsburgh, PA · Member since 2021 · 39 posts · 50 votes
4y
Hi Jonathan, Yes you can use and FHA, and it's a great way to house-hack if you can find a triplex or quad that works for you since you only have to have the crazy-low 3.5% down. Since you can only do one FHA at a time like Riley mentioned, you might as well use that one bullet on a big investment to make the 3.5% go as far as you can.
Investor · SF Bay Area · Member since 2020 · 6 posts · 1 vote
4y
Thank you for your responses. What about anything above 4 units? I know this is crossing the commercial territory but I would be interested to know the strategy there. Would it not matter if I live in the unit for a commercial multifamily?
Besides not having to rent elsewhere or pay a mortgage on a personal residence, no. I don't think there's any terms of the loan that are beneficial on a commercial loan to live in the property. Give a local commercial lender a call and ask them that question. Let us know what they say.
Indianapolis, IN · Member since 2021 · 193 posts · 150 votes
4y
@Jonathan Ng FHA loans are great because the down payment is 3.5% however it is only up to 4 units. Having it being an FHA loan you will actually have to move into the property you are going to purchase for atleast a year. Anything over 4 units is a commercial loan. Good luck!