FHA loan on 4-plex in Southern California

4 Replies

Hello all, I am curious to know if anyone recently has been able to finance a 4-plex with an FHA loan. I know the self-sufficiency test makes it extremely challenging but was anyone able to grab a property and if so would be able to share with me the numbers. I am curious on this strategy and am hoping I can execute over the next year or two. I would be willing to live within an hour of downtown LA if I can find the right property. So LA county, most of orange county, edge of san Bernardino county, and edge of Ventura county are options. Looking forward to hearing any responses. The real estate market has gotten very pricey and I am not sure I will be able to save 20-25% down to grab a 4-plex as fast as properties are appreciating.

Hey Michael,

I have actually been studying up on this for my clients going into 2022 and wish I did it.

It is a little complicated but possible.  Keep in mind the sufficiency test is based on the appraised rents but will use 75% of the actual rents towards  your debt to income ratio for qualifying.

I think this is so underutilized and a total game changer for house hackers in Los Angeles.

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Hi Michael! 

I have seen success with financing 4-plexes in LA using FHA loans. You're correct that it's very competitive and seems daunting but with the right people on your team it's entirely achievable! You can also look into NACA loans, especially if you will be house hacking and using the property as a primary residence.The process can be a bit time consuming, but if you're patient it can be a great way to obtain a property with a lower down payment and competitive mortgage rates. One key to winning in this market is come prepared with extra capital above the down payment to be able to negotiate with. Please feel free to reach out i'd be happy to assist you in any way that I can.