203k Loans for Duplexes, Triplexes, and Quadplexes
Purchasing a duplex or triplex in need of repair can be a fantastic way to acquire a new home, while using rental income from the other units to help pay your mortgage. Much like the FHA 203b loan, the 203k loan permits borrowers to purchase eligible properties with between 1 and 4 units.
FHA Eligibility Requirements for 2-4 Unit Properties
In order to qualify for the maximum FHA loan amount, a property typically needs to be classified as a multifamily property by the relevant local government body. In addition:
Single-family properties that have been subdivided must be approved
Each unit usually needs to have a separate entrance, bathroom, and kitchen
Basements and guest rooms do not usually count as separate building units
FHA Loan Limits for Multifamily Properties
Just because a property does not follow the rules mentioned above does not mean that it is not eligible for an FHA 203k loan. It simply means that a borrower won’t be able to get as much money as they could to fund the property, as the property will still considered a single-family home.
This is because the FHA loan limits are higher for 2-4 unit properties. For instance, the one-unit FHA conventional loan limit for low-cost areas in the contiguous U.S., Washington D.C., and Puerto Rico is $424,100. For two-unit properties, that amount jumps up to $543,000, and for four-unit properties, it jumps to a hefty $815,650.