FHA House Hacking in Eugene/Springfield — Are Duplexes Still Pencil?

Question

Has anyone successfully house hacked a duplex/triplex in Eugene or Springfield using FHA recently? Curious what rent numbers you’re seeing vs. purchase prices?

Dan Gandee · Answer

I just listed one that had 14 offers. I have another one that sold before I could even list it. Chris is right. Duplexes that are priced right will sell in less than 10 days on market. Supply and demand is the issue so prices remain high making penciling a house hack nearly impossible unless you hold for 7-10 years.

Chris Watkins · Answer

Hey Jacob! I'm an investor and lender here in Eugene.

It depends on your goals and where you want to live. Triplexes and Fourplexes are subject to the Self-sufficiency test, which means that 75% of rents must cover the PITI (total payment) of the mortgage, which is nearly impossible on the West Coast. Rents just aren't high enough relative to prices to make that happen. You can do a conventional loan with 5% down on any 2-4 unit and avoid that self-sufficiency test.

Rents across the Eugene-Springfield area plateau'd in late 2022-early 2023 and have been flat since. If your goal is to live for free, house-hacking a fourplex near campus is likely the only place you'll be able to achieve that. If your goal is to minimize your housing expenses and have both units cover your mortgage after you move out, that is possible, but often will require some sweat equity to add value to the property.

Happy to chat more in depth offline if you'd like. DM me or reach out and I'll help where I can!

Chris Watkins · Answer

The problem is that duplexes and small MF here are a hot commodity. I saw one last week get 17 offers (unfortunate for a client of mine). I don't think there are many assumable properties locally that will pencil for both seller and buyer.

Lawrence Potts · Answer

Hey Jacob! Love the house hacking strategy: minimizing housing expenses in this market is always a great to stash away cash for the next deal.Self-sufficiency test is difficult to overcome in our market. Like what Chris said, conventional 5% down gets around that, but they have stricture DTI ratios vs FHA.My recommendation is finding 2-4 units or a SFR w/permitted ADU. The ADU income can be used towards your DTI if it is permitted (check with your lender). Studios and 1 bed units are renting strong in this market, 2 bed units are doing fair. Above that is difficult. You could also inverse this: buy a +3 bed house with an ADU and live in the ADU and rent out the house by the room. There are a lot of ways to go about this.

Jacob Eden · Answer

This is super helpful — I appreciate the detailed breakdown. The self-sufficiency test has definitely been something I’ve been trying to wrap my head around in this market.

I’m leaning toward minimizing housing expenses first and building equity over time. I’d love to connect offline and go deeper into numbers specific to Eugene/Springfield.

Ryan Thomson · Answer

The pencil problem in Eugene isn't really about FHA vs. conventional. It's about the rate.

A $450k duplex at 6.25% is $2,771/month in principal and interest. At 3%, that same duplex is $1,897/month. That $874/month difference is what separates a deal that works from one that doesn't.

FHA and VA loans from 2019-2022 are assumable. If you find a Eugene seller with a 3-3.5% FHA loan, you step in at that rate instead of starting fresh at 6.25%. The self-sufficiency test still applies, but now the numbers have a real chance. A duplex at $874/month less in debt service is a completely different analysis.

The inventory isn't deep, but there are sellers in Eugene and Springfield who bought 3-4 years ago and are relocating or downsizing. Those loans are sitting there. Most buyers and agents don't think to look for them specifically.

Worth filtering your MLS searches for VA and FHA listings. The rate difference is the real affordability fix here until prices move significantly.

Jacob Eden · Answer

Love that breakdown, especially the ADU angle. I’ve been seeing similar strength with studios and 1-beds locally.

The SFR + permitted ADU strategy is interesting, especially with how tough the self-sufficiency test can be here. I’ve also noticed room-rent strategies penciling better than traditional 2–3 bed unit rents in certain neighborhoods.

Would be great to connect and compare what you’re seeing on the lending side vs what I’m seeing on the acquisition side.

FHA House Hacking in Eugene/Springfield — Are Duplexes Still Pencil?

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