House hacking just got a lot more accessible.

[Ravi Kaku]

For years, one of the biggest barriers to buying a duplex, triplex, or fourplex with a conventional loan was the down payment requirement. Many buyers needed 15%-25% down to get into a multi-family property.

Today, eligible owner-occupied conventional financing allows as little as 5% down on a 2-4 unit property. FHA has also continued to offer a 3.5% down option for owner-occupied multi-family properties.

Let's look at a simple example:

Purchase Price: $500,000

Old Conventional Requirement (15% down):
$75,000 down

New Conventional Requirement (5% down):
$25,000 down

That's a difference of $50,000 less needed upfront.

For someone looking to house hack, that can mean getting into a property years sooner, living in one unit, renting out the others, and using the rental income to help offset the mortgage payment.

House hacking remains one of the most powerful ways to get started in real estate investing because you're able to use owner-occupied financing instead of traditional investment property financing.

If you're house hacking today, would you choose FHA at 3.5% down or Conventional at 5% down?