House Hacking a Duplex: Step-by-Step Guide

To house hack a duplex, you buy a two-unit building with an owner-occupied loan (FHA at 3.5% down, conventional at 5% down, or VA), move into one unit within 60 days of closing, and rent the other. The same approach works for a triplex or fourplex, but FHA adds a rent test on three- and four-unit buildings that the rent must pass. Before you offer, confirm the city recognizes every unit, check the meters, layout, and rental unit's condition, and read any existing leases. This page walks through those checks in order; what is house hacking covers the strategy as a whole.

What to look for in a duplex listing

• Legal unit count. A listing that says "duplex" is not proof. Check the zoning, the county assessor's record, and the building permit history for the second unit. FHA requires the property to comply with zoning, and the appraiser must report whether the current use does. A use the local zoning office accepts as "legal non-conforming" can still qualify, but the appraiser must note it and state whether the building could legally be rebuilt if destroyed.
• Separate meters. Separate electric and gas meters let each tenant pay their own bills. With a shared meter, check your state's rules on charging tenants for utilities before you plan a split; otherwise budget to pay for the tenant's use. Ask for 12 months of utility bills either way.
• Unit layout. Decide which unit you will live in before you run numbers, since the lender counts rent only from the units you do not occupy. If one unit is a three-bedroom and the other a one-bedroom, living in the smaller unit leaves the higher rent coming in. Check shared walls, stairs, and laundry, since you will share them with your tenant.
• Condition of the rental side. FHA requires the property to be safe, sound, and secure. Defects that affect health, safety, or soundness must be fixed before the loan closes; cosmetic items, such as a dripping faucet or torn screens, do not have to be repaired.
• Existing leases. Get every lease, the current rents, and the deposits held. If the unit you plan to live in has a tenant whose lease runs past your move-in deadline, the purchase may not work.
• Year built. For housing built before 1978, the seller must disclose known lead-based paint and give you the EPA lead pamphlet, and you get 10 days to have a lead inspection unless you agree to a different period or waive it.

Duplex vs triplex vs fourplex

More units bring more rent, but also higher prices, stricter FHA rules, and more tenants to manage. The figures below are for 2026.

Conventional lenders can also offer 5% down on a 2-4 unit home you will live in. Freddie Mac allows it on purchases approved through its automated underwriting system and within the baseline conforming limit; larger "high-balance" loans in expensive counties and manually underwritten loans need more down.

How FHA's self-sufficiency test works

On a three- or four-unit building, FHA takes the appraiser's market rent for every unit, including the one you will live in, subtracts 25% (or the appraiser's vacancy and maintenance estimate, if higher), and requires the result to cover the full monthly payment of principal, interest, taxes, and insurance. The example below also counts FHA mortgage insurance in the payment, which is the conservative way to run it.

Example. A $700,000 fourplex bought with 3.5% down on a 30-year loan at 7.3%, with the 1.75% upfront FHA premium financed into the loan (near Freddie Mac's 7.32% average for October 22, 2026) has a monthly payment of about $6,072: $4,712 principal and interest, $310 FHA mortgage insurance, $700 property tax, and $350 insurance. If the appraiser puts each unit at $2,000 a month:

• $2,000 x 4 units = $8,000
• $8,000 x 75% = $6,000
• $6,000 is less than $6,072, so the building fails the test.

At $2,100 per unit, the result is $6,300 and the building passes. A duplex has no such test. You would also need about $18,200 (three months of payments) in reserves after closing for the fourplex.

The test is separate from qualifying income. FHA counts 75% of the lower of the appraiser's market rent and the lease rent for the units you do not occupy as income. Fannie Mae also uses 75% of gross rent and requires the lender to document your current housing payment before counting any of it. If you have less than 12 months of property management experience, that rent can only offset the property's own payment. Calculating rental income for house hacking shows how to estimate these rents, and single-family vs multi-family compares the property types for later purchases.

What to verify before closing

1. The appraisal's rent figures. For a 2-4 unit home, FHA accepts legacy Fannie Mae Form 1025 or the redesigned Uniform Residential Appraisal Report (UAD 3.6 format), optional since October 1, 2026. Compare the appraiser's market rents with the rents you planned on.
2. An inspection of every unit, including the occupied ones. Write access for the inspector into the contract.
3. The rent roll against the leases. Confirm each tenant's rent, lease end date, and deposit match the seller's numbers, and ask tenants to sign a statement confirming them.
4. How deposits transfer. Ask the closing agent how tenant deposits will be credited to you at closing; state law sets what you owe tenants after the sale.
5. Your move-in date. Your unit must be vacant in time for you to move in within 60 days.
6. Insurance for the rented units. Get a quote that covers both units and your liability as a landlord before you remove the inspection contingency; see insurance for house hackers.
7. Financing terms. Confirm the lender's final reserve and rent requirements match what you planned.

Rental property due diligence has a longer checklist for documents and inspections.

Running the building while you live next door

• Use written leases and a separate bank account. Collect rent electronically so there is a record, and keep receipts for every expense.
• Screen with written criteria. Federal fair housing law exempts an owner who lives in a building with four or fewer units from most of its rental rules, but not from the ban on discriminatory ads and statements. State and local fair housing laws may have no such exemption. Apply the same criteria to every applicant; see screening housemates and tenants.
• No stays under 30 days on an FHA loan. FHA borrowers on a 2-4 unit home sign HUD form 92561, agreeing not to rent any part of the property for hotel or transient use or for less than 30 days.
• Give a lead disclosure for each new lease if the building is pre-1978, and keep signed copies for three years.
• Split expenses for taxes. In the IRS's duplex example, an owner who lives in one of two equal units deducts half the mortgage interest and property tax as rental expenses on Schedule E and takes the other half as personal deductions if itemizing. You also depreciate the rental half of the building (not the land) over 27.5 years. Expenses for only the rental unit, such as painting it, are fully deductible.
• Plan for month 12. Once you have met the one-year occupancy promise, you can stay, move out and rent both units, or buy your next home. FHA generally insures only one principal-residence loan per borrower at a time, so a second purchase while you keep the FHA loan usually needs conventional or VA financing, unless an exception applies, such as a job move of more than 100 miles. Financing your first house hack compares the FHA, VA, and conventional options for either purchase.