FHA loans are available for properties with 1–4 residential units, as long as the buyer occupies one unit as their primary residence. A duplex, triplex, or quadplex purchased with FHA financing at 3.5% down, with the owner living in one unit, is the most powerful entry point in real estate investing. You access the best loan rates with the smallest down payment while immediately generating rental income from adjacent units.
FHA loan limits vary by county and property type. Multi-unit limits are higher than single-unit limits. In high-cost areas, FHA limits for 4-unit properties can exceed $2M. Check current limits at the HUD website for your specific county — limits update annually and vary significantly by market.
FHA requires you to occupy the property as your primary residence for at least 12 months. After 12 months, you can move out and retain the FHA loan while renting all units. Many investors cycle through multiple properties using this strategy — buy with FHA, occupy for 12 months, move out, repeat with a new FHA purchase. You can generally have one FHA loan at a time.
FHA appraisals include property condition assessment. Properties with peeling paint, broken windows, non-functional HVAC, roof leaks, or other safety and habitability issues will not pass FHA appraisal. If you are using FHA on a distressed property, condition issues must be corrected before closing — which complicates using FHA on as-is acquisitions.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.