Finding the Right Loan for Your Multiunit Property

Multiunit properties are becoming a popular way to purchase a home and invest in your financial future. By providing both a roof for you and your family, as well as a rental unit that can generate cash, these properties help build a strong, stable financial future.

Earlier, we discussed the decision to purchase a multiunit property and whether or not being a landlord is right for you. If you decide to purchase an investment property, you have to find the right financing, so let’s look at a few of the best options for loans on a multiunit property!

Multiunit Properties, Part 2: Financing Options for Your Investment

Freddie Mac Home Possible Program 

One of the top programs for the purchase of multiunit housing is Freddie Mac’s Home Possible. This program was launched in January, 2018, making it one of the newest options available to homeowners. Between a combination of purchase price and the location of a property, this program provides some of the lowest down-payment requirements you can find, as well as low interest rates compared to anything that’s not an FHA or VA loan.

This program is getting a lot of traction among buyers seeking investment properties and wanting to create a portfolio of profit-generating houses. If you are willing to purchase a duplex as your first property, this program could be an excellent option. You’ll have to live in the property for at least 12 months, but you can later move out and keep the property as a rental. If you wish, you can then purchase another property structured as owner-occupied and repeat the process. With this program, there are income limits. The limits are $111,000 for any property that has an income limit, but there is a surprising amount of areas that do not have income limits.

For this program, you can get an owner-occupied property with two to four units for up to 95% financing. There are, of course, income restrictions by region, but you can access Freddie Mac’s online system to find the requirements in your specific area. There is a 3% minimum borrower contribution requirement, and you must have two to four months worth of reserve to use Home Possible loans.

Like income limits, the total amount you can borrow is also adjusted by region. The program is based on the conforming loan limits, not the conforming high balance loan limits. In San Diego, the max loan amount for two-unit properties is $580,150, while three-unit properties are eligible for $701,250. If you are looking to purchase a four-unit property in San Diego, you can borrow up to $871,450.

Standard Fannie Mae & Freddie Mac Loans

There are also standard Fannie Mae and Freddie Mac loans, which have many advantages and could be the right option for borrowers in San Diego and across the country. Standard Fannie Mae and Freddie Mac loans share similar requirements.

For owner-occupied two-units, you can get a loan for up to 85% of the purchase amount, while owner-occupied three and four-unit properties are eligible for 75% financing. If you are purchasing the unit as strictly an investment, and you will not occupy any of the units, you will still be eligible for 75% financing, which applies to two, three, and four-unit properties.

Federal Housing Administration

The Federal Housing Administration also provides loans for multiunit housing for owner-occupied properties. In San Diego, you can get a high-quality loan with a large amount that should allow you to purchase a wonderful property. Loan limits in San Diego are $831,800 for a two-unit property and $1,005,450 for a three-unit property. For a four-unit property, you can borrow nearly $1.25 million. These loans are not given by the FHA, but are supported and insured by the office, giving greater assurances to lenders and making the loans more available to the general public.

Department of Veterans Affairs

The Department of Veterans Affairs, most commonly referred to as the “VA,” supports home loans to veterans and qualifying family members, such as spouses and children. For these loans, you can get up to 100% financing for the property, making it one of the few programs that offers complete financing with no down payment on multiunit housing. You can also get 25% of the difference to a maximum loan amount of $1.5 million.

In San Diego, the loan limits for a VA-backed loan are the same as those for an FHA-backed loan.

Portfolio Loan Options for Multiunit Purchase

With this unique product, some investors will allow for the purchase of two units up to a first-loan amount of $1.1 million with a 10% down on the second loan. Owner occupied two-units are available up to a first loan amount of $1.1 million with a 10% down payment, with the loan structured as a first loan or a second loan with a HELOC. The maximum amount for the loan for both the first and second cannot exceed $1.5 million. The application of a $1.1-million first mortgage, $400,000 second mortgage, and a 10% down payment would allow you to purchase a two-unit property up to a purchase price of almost $1.7 million.

Jumbo Loans

If you are interested in a high-priced purchase, you can look to a jumbo investment property of two to four units, and interest-only options are available. Most jumbo investment property loans on two to four units will have a limit of 75% loan-to-value. This will actually allow for 85% loan-to-value up to a loan amount of $2.5 million, allowing you to take advantage of high-priced loans for serious profit potential. The program is available with an interest-only term that will increase cash flow and limit the down-payment needs.

Work with an Expert to find the Right Multiunit Property Loan

Before making this important financial decision, be sure to meet with an experienced mortgage expert. Our team can describe all the details so you can make an informed decision.

With a commonsense approach to underwriting, we will also do whatever we can to help you get approved!


Incredible Turnaround and Stellar Customer Service. Chad and his team helped us get into our first home here in San Diego. When we first started the process we were skeptical it would even be worth applying. But Chad and his team walked us through the whole lending process with integrity and know how that surpassed our expectations. After helping us to pull together our pre-qualification, he and his team stayed at the ready. Before we even walked up to a home we were seriously interested in he had the data we needed over to us and our realtor. After finding the home we wanted to place a bid on, we were able to place a bid with a matter of a few hours. Then, after having our offer accepted, he had our loan package completed and the keys in our hands in under a month — I am pretty sure it was less than. Like I said, incredibly fast and professional turnaround. if you are looking for a motivated lender who can walk you though every detail and have your back every step of the way, Chad and his team at HomePoint Financial is your best decision. Recommend them highly!”

“Chad Baker is THE BEST, most professional, understanding, HONEST person I’ve ever worked in the mortgage industry. He knows exactly what he’s talking about, will never promise something he can’t deliver, and will bend over backwards to get you what you need. I had a very unique problem qualifying and every other mortgage company I worked with assured me from the beginning that they could get me financed, and then it would all fall apart once we hit underwriting. Chad understood my circumstance from the beginning and patiently explained every step of the way. I can’t thank you enough Chad! Juliann has been great keeping me updated and making sure that everything comes together in a timely fashion. She also appreciates my sense of humor, which gives personality to a boring funding process. Thanks Juliann! I HIGHLY recommend Home Point and if I ever buy another home, will absolutely use them again.”

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