Can an FHA loan be used...

10 Replies

I have a question. I was told by a Texas real estate agent that if I used an FHA loan to purchase a duplex, triplex, or 4-plex that I intended to occupy that I could not collect any rent money from other units because that wold be considered mortgage fraud because FHA loan can not be used for investments. Can someone tell me if this is true. Thanks

Your agent is an idiot. The intent for an owner occupied 2-4 unit is for you to live in one unit and collect rent from the others. SMH.

agree with wayne, that agent does not know what they are talking about. You must live in one unit for the first year, but you can collect rent from the remainder unit/units.

You're good as long as you live in one of the units for a year! 

Everyone here is correct; you absolutely CAN collect rent from units 2, 3, and 4. 1-4 unit properties are considered "residential" and therefore qualify for an FHA loan. On top of that, incoming rent from the other three units (on a 4-unit property) would count as qualifying income. Only 70% of it, anyhow - assuming you don't have a 2-year history of collecting rent. The remaining 30% is to account for maintenance, fees, marketing, vacancy, etc.

Yeah the agent is incorrect. As long as you live in one of the units you can collect rent on the others.

Fire your agent. Immediately they don’t know investing

You have to live in one unit that you purchase as owner occupied.

I think the general rule of thumb is for at least one year.

But you absolutely can collect rent on the remaining units.

@James Trower so frustrating that so many people are still out there who don't know these things. Posts above are correct. Not only are you allowed to rent the units with a FHA loan, FHA will even allow that rental income to be used to qualify you for the mortgage.

Thanks everyone. Looking for a new agent. Does anyone have any recommendations in the Houston area?

Wow, just wow! This is embarrassing for all agents out there that we have people in our profession spreading such negligent misinformation. Please don't hold it against all of us :)

The mortgage officer is the one deciding if the FHA is adequate on multi-family. Realtor is the one finding and negotiating a deal-deligation of authority.

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