Plan for the units and the occupancy.

Owner-occupied and investment multi-family financing can involve occupancy, qualifying rent, reserve, appraisal, and property-condition considerations that differ from a single-family transaction.

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What matters

Start with the connected picture.

Occupancy, qualifying rents, reserves, property condition, ownership, and loan purpose can all shape a multi-family financing path.

Clarify occupancy before comparing programs
An owner-occupied 2-4 unit property qualifies for residential down payment terms (as low as 3.5% for FHA or 5% for conventional loans). In contrast, non-owner-occupied multi-family purchases require 20% to 25% down payments under conventional or DSCR guidelines.
Rental income calculations: vacancy factors and documentation
Underwriting guidelines typically credit 75% of gross rental income from non-occupied units to offset the mortgage payment, applying a 25% deduction for ongoing vacancy and maintenance expenses.
Reserves and liquidity requirements for 2-4 units
Unlike single-family homes that may require zero to two months of reserves, multi-unit purchases often require 3 to 6 months of full PITIA payments held in liquid accounts after closing.

Know your choices

Programs you should know about.

Multi-family

Owner-occupied and investment paths for two- to four-unit properties.

Conventional

Fixed, adjustable, high-balance, and flexible purchase paths.

FHA

Purchase, renovation, and refinance structures subject to FHA guidelines.

VA

Purchase and refinance paths for eligible military borrowers.

Investment property

Financing structures for non-owner-occupied real estate.

DSCR

Investment financing that may evaluate qualifying property cash flow.

Prepare these items

Organize what you already know.

A clear property and ownership plan helps focus the comparison on the guidelines that actually matter.

Will you occupy one of the units as your primary residence for at least 12 months?

Are all units legally permitted under municipal zoning ordinances?

For 3-4 unit properties using FHA, will projected market rents pass the self-sufficiency rule?

Are utilities separately metered for each unit (electric, gas, water)?

How many months of post-closing reserves are documented in verified asset accounts?

Financing may be considered through conventional, FHA, VA, DSCR, or other eligible programs, subject to the complete borrower, property, and transaction.

Illustrate property cash flow

Property cash-flow coverage

Divide an annual net-cash-flow scenario by annual debt service for the same period. This is an educational illustration—not a lender's DSCR calculation.

Annual net cash flow

Property income less the operating costs and reserves you choose to include, before debt service.

Annual debt service

Use the total annual property-debt payments for the same period.

Illustrative coverage ratio

1.25×

The net cash flow entered is greater than the debt service entered.

A 1.00× result only means the two figures entered are equal. It is not a pass, fail, or eligibility decision. Program methodology and required components vary.

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Common questions

Quick answers for first-time buyers.

Open a question for a short answer. If your situation is different, ask Ardi.

Can I use rental income to qualify?

Yes, you can typically use 75% of the projected or current lease income from the other units to help you qualify for the loan.

What is the down payment for a duplex?

If you plan to live in one of the units, you may qualify for options with as little as 3.5% (FHA) or 5% (Conventional) down.

Are reserves required?

Multi-family properties often require you to have additional cash reserves (e.g., 3-6 months of payments) left over after closing.

Does it matter if units are occupied?

Existing leases are helpful for underwriting, but market rent appraisals can be used for vacant units in most cases.

Your next step

Treat the property as a complete scenario.

Use the planning tools to organize the units, occupancy, and property details, or talk with Ardi about the available paths.

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