House hacking is an owner-occupied multi-unit purchase. You occupy one unit yourself as your primary residence. The other 1-3 units are rented to tenants. Because the loan is owner-occupied, you get access to the cheapest residential financing terms in the market: low down payment, lower rate than investment financing, lower mortgage insurance cost.

The strategic point is that the rental income from the non-owner units offsets your mortgage payment. With the right property in the right market, the net housing cost is near zero - or in some cases the building cash-flows positive even though you are living there. The bigger long-term benefit is the equity build, the head start on a rental portfolio, and the option to move out after 12 months and convert the entire building to an investment property.

• FHA (1-4 unit owner-occupied). 3.5% down with the FHA program minimum 580 FICO. We work with lenders going to program minimums where allowed. FHA loan limits are higher on 2-4 unit than on single-family, which is helpful in higher-cost markets.
• VA (1-4 unit owner-occupied). 0% down for VA-eligible borrowers with full entitlement. The VA program supports 2-4 unit purchases as long as the borrower occupies one unit. VA has no monthly mortgage insurance.
• Conventional (1-4 unit owner-occupied). 5% down on a 2-unit, 15% down on a 3-4 unit under Fannie Mae and Freddie Mac standard guidelines. Some lenders flex on the 3-4 unit down payment for strong borrowers. Conventional is often the right choice when FICO is high and the borrower wants to avoid lifetime FHA mortgage insurance.
• USDA. 1-unit only. Not eligible for 2-4 unit house hacking.

The qualification math is the part most first-time house hackers do not understand. The lender does not just look at your W2. They credit you with rental income from the units you are not occupying.

• Standard credit is 75% of gross market rents. The 25% reduction is the lender's vacancy and operating expense factor.
• For new purchases with no lease history. The appraiser produces a market-rent schedule (Fannie Form 1007 for single-family or Form 1025 for 2-4 unit) estimating what each non-owner unit would rent for. That figure is used.
• For refinances with established leases. Actual lease amounts are used (still subject to the 75% factor).
• The owner-occupied unit's rent does not count. Only the units you are not personally occupying.

Example: a fourplex with three rentable units at $1,500/month each generates $4,500/month of gross rents. 75% of that is $3,375/month, which is added to your qualifying income for purposes of computing the debt-to-income ratio. That is often the difference between qualifying and not.

• Owner-occupancy is typically required for at least 12 months on FHA, VA, and conventional owner-occupied loans.
• After the 12 months, you can move out and rent your unit too, converting the whole building into a pure investment property.
• The "live in flip" or "BRRRR meets house hack" strategy uses this to chain multiple house hacks year after year, stacking owner-occupied financing on each acquisition.
• The owner-occupancy certification you sign at closing is a federal-document attestation. Do not claim owner-occupancy on a property you do not actually intend to occupy.

• Duplex (2-unit).
• Triplex (3-unit).
• Fourplex (4-unit).
• Single-family with a legal accessory dwelling unit or in-law suite (technically a 1-unit purchase but functions as a hybrid). See our ADU financing guide.

• 5+ unit properties are commercial real estate and require commercial financing (typically 25%+ down, recourse, shorter terms). Different product entirely.
• Single-family homes without a separate legal dwelling unit. You cannot "house hack" a single-family by renting bedrooms and counting the rent as qualifying income on an owner-occupied loan.
• Illegal duplex conversions or unpermitted ADUs. If the unit is not legally separate and permitted, it does not count as a unit for financing purposes and the rent does not count as qualifying income.

Illustrative only. Numbers vary by market, property, and timing.

• Fourplex purchase at $600,000.
• FHA 3.5% down = $21,000.
• Approximate mortgage payment around $3,800/month at current rates (excludes discount points).
• Occupy one unit. Rent the other three at $1,500/month each = $4,500/month gross rents.
• Net headline housing cost: $3,800 - $4,500 = roughly free, or positive cash flow, before property taxes, insurance, maintenance, vacancy, and capital expenditures.
• After realistic carrying costs (taxes, insurance, repairs, reserves), the property may still net to zero or slightly negative housing cost. Either way, dramatically below what you would pay for a comparable single-family in the same market.

• Living next to your tenants. Privacy, noise, conflict resolution, and the inability to fully disconnect from the landlord role.
• Vacancy on rental units. When a unit is empty, you cover its share of the mortgage out of pocket.
• Property management workload. Tenant screening, leases, repairs, turnovers, late rent. House hackers typically self-manage in year one because they live on site.
• Local short-term-rental and rental regulations. Some cities restrict the ability to rent units short-term or impose rent-control rules. Check local law before underwriting projected rents.
• Multi-unit FHA appraisals are more complex. Form 1025 appraisals take longer and run into condition issues more often than a simple single-family.

• Move out and rent your unit. The whole building becomes investment property. You do not have to refinance just because you moved out; the loan you closed with stays in place.
• Refinance optionally. If rates have moved favorably or you want to pull cash out, refinance into an investment-property loan. If you bought with FHA and want to drop FHA mortgage insurance, a conventional investment refinance can do that once you have enough equity.
• Chain to the next house hack. Buy another 2-4 unit owner-occupied a year later. Stack the strategy. This is the foundational entry play for many residential real estate portfolios.

Cost segregation works on multi-unit rental property. The catch on a house hack is that the owner-occupied unit is personal use and is not depreciable. The cost-seg study allocates costs across the non-owner units only, and the accelerated depreciation flows from those units.

The non-owner unit portion of the building is bonus-depreciation-eligible on the components a cost-seg study reclassifies into 5/7/15-year property. See the dedicated bonus depreciation and cost segregation pages for the mechanics, the phaseout schedule, and the W2-offset considerations.