FINANCING

FHA Loans for House Hacking: The Investor's Cheat Code

Updated March 2026

The Cheat Code

FHA loans require just 3.5% down and accept credit scores as low as 580. The catch: you must live in the property. But nothing says you can't buy a duplex, triplex, or fourplex and live in one unit while renting the others. This is house hacking — and FHA makes it absurdly accessible. A \$200K duplex requires \$7,000 down. A \$250K fourplex: \$8,750. Compare that to a conventional investment property loan requiring \$50-62K down on the same properties.

The FHA Rules That Matter

You must move in within 60 days of closing. You must live there as your primary residence for at least 12 months. You'll pay mortgage insurance (MIP) for the life of the loan — about 0.85% of the loan amount annually (\$1,666/year on a \$196K loan). FHA loan limits vary by county — check your county's limit at hud.gov. In most areas it's \$524K for a fourplex, which covers most markets outside of expensive coastal cities.

The Math on a Fourplex

Buy a fourplex in Indianapolis for \$280K. FHA down: \$9,800. Three units rent for \$950 each = \$2,850/month. Your PITI + MIP: roughly \$2,100. After setting aside 10% for vacancy/maintenance (\$285), you're living in a unit you own for \$0 out of pocket per month. Actually, you're slightly cash-flow positive. After 12 months, move out, rent your unit for \$950, and the whole building generates roughly \$600-800/month in cash flow.

The Repeat Strategy

After 12 months in your FHA property, move into a new FHA house hack. You can only have one FHA loan at a time for primary residence, but once you move, the first property becomes an investment. Some investors do this 3-4 times before they're 30 and end up with 8-16 rental units, all purchased with 3.5% down. It's the fastest way to build a portfolio with minimal capital.