House Hacking a 2-4 Unit Home: What 44,005 Owner-Occupied Purchases Paid in 2025 (Federal Data and Loan Rules)
Quick Answer
As of October 7, 2026, the newest federal loan-level record (Home Mortgage Disclosure Act data, loans made in 2025) shows 44,005 originated first-lien home-purchase loans on 2-, 3- and 4-unit homes that the buyer would live in, totaling $22.63 billion, 1.51% of the 2,919,670 owner-occupied purchase loans on one to four units (our arithmetic). That is the measurable footprint of house hacking: buying a small building, living in one unit and renting the rest. Conventional loans were 62.8% of them (27,622), FHA 29.8% (13,127), VA 7.4% (3,253) and USDA 3. The median note rate was 6.75% on conventional loans (against 6.5% on one-unit purchases), 6.25% on FHA and 6.125% on VA. The median loan-to-value implied a down payment of 15% on conventional loans, 3.5% on FHA and none on VA (our arithmetic on medians). FHA treats 3- and 4-unit buildings differently: the rent from all units, less 25%, must cover the full payment (HUD Handbook 4000.1, II.A.1.b.iv.(B)(3)(c)); only 1,940 of the 13,127 FHA loans were on 3- or 4-unit buildings (14.8%).
Key Takeaways
- 2025: 44,005 owner-occupied purchase loans on 2-4 units, $22.63 billion, against 2,875,665 on one unit; 2-4 units were 1.51% of the market. In 2024 there were 45,997. Conventional 27,622, FHA 13,127, VA 3,253, USDA 3.
- Down payment, as implied by the median loan-to-value: conventional 85% (15% down; one-unit buyers 80%), FHA 96.5% (3.5%), VA 100% (0%). Only 45.3% of conventional 2-4 unit loans had an LTV of 80% or below, and 80.0% of FHA loans were above 95% (our arithmetic).
- Rate: conventional 2-4 unit median 6.75% against 6.5% for one unit (+0.25 points); FHA and VA medians were the same as for one unit (6.25% and 6.125%). Each fell 0.125 points from 2024 (conventional 6.875%, FHA 6.375%, VA 6.25%).
- Rules: FHA requires occupancy within 60 days and intent to stay one year (II.A.1.b.iii.(A)(2)(a)), 3.5% minimum investment (II.A.2.c.ii), 96.5% maximum LTV on purchases (II.A.2.b.ii), and for 3- and 4-unit homes net rent from all units to cover PITI (II.A.1.b.iv.(B)(3)(c)). Fannie Mae allows a 95% LTV on 2-4 unit principal residences (Eligibility Matrix, August 5, 2026). VA guarantees a dwelling of up to four family units that the veteran owns and occupies (38 U.S.C. 3710(a)(1); 38 CFR 36.4301).
- 2026 limits for 2-4 units: FHA floor $693,050 / $837,700 / $1,041,125 and ceiling $1,599,375 / $1,933,200 / $2,402,625 (Mortgagee Letter 2025-23); conforming baseline $1,066,250 / $1,288,800 / $1,601,750 (FHFA).
- Worked example (our arithmetic, labelled inputs): a $475,000 3-unit FHA purchase at 6.25% with HUD FY2027 two-bedroom rents of $1,879 in the Providence-Fall River area has net self-sufficiency rent of $4,227.75 against a PITI of $3,702.93, a ratio of 87.6%; the test is passed until the rate reaches about 7.25% with mortgage insurance included.
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House hacking in federal data: owner-occupied 2-4 unit purchase loans (HMDA 2024-2025), FHA, Fannie Mae and VA rules, 2026 loan limits and a worked example
Counts, note-rate percentiles, loan-to-value, loan size, units and states for owner-occupied home-purchase loans by loan type for 2024 and 2025, with the rule values, section numbers, 2026 loan limits and the 3-unit FHA self-sufficiency arithmetic. One source per row.
House hacking, measured: who actually buys a 2-4 unit home to live in
House hacking has no definition in federal data, so we use the loan record. We counted loans that were originated (HMDA action taken = 1), for a home purchase (loan purpose = 1), secured by a first lien, on a property the borrower reports as a principal residence (occupancy type = 1), with a closed-end loan that is not a reverse mortgage, and a total of 2, 3 or 4 dwelling units. One-unit purchases under the same filters are the comparison. Regulation C has lenders report whether the property is a principal residence, a second residence or an investment property and the number of individual dwelling units (12 CFR 1003.4(a)(6) and (a)(31)). A buyer who says “principal residence” on a fourplex and rents out the other three is in this count; one who buys a duplex as a pure investment is not. We split by the loan type field: conventional, FHA, VA and USDA. This is a different cut from our investment property mortgage rates page, which counts investor loans (occupancy type 3) and refinances too, and it uses the same loan-record fields but a different population (all four loan types, home purchases only).
Owner-occupied home-purchase loans, 2-4 units against one unit, 2025
| Loan type | 2-4 unit loans | Share of that type's purchases | Median rate, 2-4 units | Median rate, 1 unit | Median LTV, 2-4 units | Implied down payment | Median LTV, 1 unit | Median loan, 2-4 units | Median loan, 1 unit |
|---|---|---|---|---|---|---|---|---|---|
| Conventional | 27,622 | 1.44% | 6.75% | 6.5% | 85% | 15% | 80% | $445,000 | $335,000 |
| FHA | 13,127 | 2.07% | 6.25% | 6.25% | 96.5% | 3.5% | 96.5% | $405,000 | $295,000 |
| VA | 3,253 | 0.99% | 6.125% | 6.125% | 100% | 0% | 100% | $405,000 | $355,000 |
| All four loan types | 44,005 | 1.51% | 6.565% | 6.49% | 95% | 5% | 90% | $425,000 | $325,000 |
Two things stand out. House hacking is small: 2-4 units were 1.44% of conventional purchase loans, 2.07% of FHA and 0.99% of VA. And the mix is not FHA-dominated: conventional loans were 62.8% of 2-4 unit purchases, and the typical conventional buyer put down far more than the program minimum. USDA lends almost nowhere here: 3 loans in 2025, 1 in 2024, against 33,380 one-unit USDA purchase loans. 1,527 of the 44,005 loans (3.5%) carry the business-or-commercial-purpose flag even though the borrower lives there, 913 of them (17.1%) among 3-unit properties, against 117 of 35,646 duplex loans (0.3%), so the flag is far more frequent on 3-unit properties; HMDA does not say why.
The down payment people actually made
The loan-to-value ratio in the public file is the loan amount against the property value the lender relied on (the data dictionary calls the field combined loan-to-value; the downloaded column is loan_to_value_ratio, valid values 5 to under 200). One hundred minus the median is an implied down payment, which is our arithmetic on a median and not the median down payment.
Share of 2025 owner-occupied 2-4 unit purchase loans by loan-to-value band (loans with a valid LTV)
| Group | Loans with valid LTV | LTV 80% or below | Over 80% to 90% | Over 90% to 95% | Over 95% |
|---|---|---|---|---|---|
| Conventional, 2-4 units | 26,876 | 45.3% | 16.4% | 33.0% | 5.3% |
| Conventional, 3-4 units | 5,430 | 36.5% | 15.6% | 43.1% | 4.8% |
| FHA, 2-4 units | 12,911 | 2.5% | 6.2% | 11.3% | 80.0% |
| VA, 2-4 units | 2,646 | 2.9% | 4.2% | 5.0% | 87.8% |
The program minimums are in the next section; the behavior is here. FHA buyers sit at the cap: 80.0% borrowed over 95% of value, the 3.5% down payment. VA buyers borrowed 100% in the median case. Conventional buyers did not use the 5% down that Fannie Mae allows on a 2-4 unit principal residence: 45.3% borrowed 80% or less, and the median was 85%. For 3- and 4-unit conventional loans it was 36.5% at 80% or less. Price may play a part (the conventional median loan was $445,000 on a median value of $555,000), but HMDA does not say why.
Rates: the same as a one-unit home, except on conventional loans
On FHA and VA loans a 2-4 unit purchase had the same median rate as a one-unit purchase in 2025 (6.25% and 6.125%). On conventional loans it was 6.75% against 6.5%, 0.25 points more, and the middle half ran from 6.375% to 7.125%. Buying the building as an investment costs more: investor loans carry a rate premium over owner-occupied loans, which our investment property mortgage rates page measures from the same data. It is the premium a house hacker avoids by living in one unit and faces again after moving out.
2025 against 2024, owner-occupied 2-4 unit purchase loans
| Loan type | Loans 2024 | Loans 2025 | Median rate 2024 | Median rate 2025 | Median LTV 2024 | Median LTV 2025 | Median loan 2024 | Median loan 2025 |
|---|---|---|---|---|---|---|---|---|
| Conventional | 29,263 | 27,622 | 6.875% | 6.75% | 85% | 85% | $435,000 | $445,000 |
| FHA | 14,078 | 13,127 | 6.375% | 6.25% | 96.5% | 96.5% | $395,000 | $405,000 |
| VA | 2,655 | 3,253 | 6.25% | 6.125% | 100% | 100% | $395,000 | $405,000 |
| All four loan types | 45,997 | 44,005 | 6.625% | 6.565% | 95% | 95% | $415,000 | $425,000 |
The count fell 4.3% (from 45,997 to 44,005) while VA rose 22.5% and FHA and conventional fell. Rates came down 0.125 points in every loan type. Conventional and FHA median loan sizes rose by $10,000.
Two units, three units, four units
The finance mix changes with building size. A duplex is 81.0% of the 2-4 unit loans; three and four units together are 19.0% (our arithmetic).
Owner-occupied purchase loans by number of units, 2025
| Loan type and units | Loans | Median rate | Median LTV | Median loan | Median property value |
|---|---|---|---|---|---|
| Conventional, 2 units | 22,134 | 6.75% | 85% | $415,000 | $525,000 |
| Conventional, 3 units | 3,667 | 6.75% | 90% | $575,000 | $675,000 |
| Conventional, 4 units | 1,821 | 6.875% | 93.008% | $575,000 | $655,000 |
| FHA, 2 units | 11,187 | 6.25% | 96.5% | $405,000 | $415,000 |
| FHA, 3 units | 1,267 | 6.25% | 96.5% | $465,000 | $475,000 |
| FHA, 4 units | 673 | 6.19% | 96.5% | $445,000 | $475,000 |
| VA, 2 units | 2,322 | 6.175% | 100% | $385,000 | $385,000 |
| VA, 3 units | 398 | 6.125% | 100% | $480,000 | $505,000 |
| VA, 4 units | 533 | 6.125% | 100% | $505,000 | $505,000 |
The three- and four-unit conventional borrowers put more down (median LTV 90% and 93.008%, against 85% for duplexes). HMDA does not say why. The FHA and VA 3-4 unit counts are small: 1,940 FHA loans, the number of FHA buyers in the whole country who had to meet the self-sufficiency test in 2025, and 931 VA loans.
Where the loans are
Largest states for owner-occupied 2-4 unit purchase loans, 2025 (all loan types)
| State | Loans | Share of US 2-4 unit loans | Median rate | Median loan | Median LTV |
|---|---|---|---|---|---|
| NY | 6,758 | 15.4% | 6.5% | $625,000 | 85% |
| MA | 3,437 | 7.8% | 6.49% | $615,000 | 95% |
| NJ | 3,402 | 7.7% | 6.5% | $645,000 | 95% |
| CA | 3,244 | 7.4% | 6.5% | $775,000 | 85% |
| IL | 3,003 | 6.8% | 6.75% | $395,000 | 95% |
| OH | 2,075 | 4.7% | 6.875% | $275,000 | 92% |
| PA | 2,036 | 4.6% | 6.625% | $265,000 | 95% |
| TX | 1,971 | 4.5% | 6.375% | $385,000 | 96.5% |
New York alone was 15.4% of the country; New York, Massachusetts, New Jersey, California and Illinois were 45.1%. By program, FHA 2-4 unit loans were led by New York and New Jersey (1,450 each), Massachusetts (1,346), Illinois and California; Texas was the first state for VA (545 of 3,253), then California, New York and Florida. For the 3-unit FHA loans that must pass the self-sufficiency test, the order was Massachusetts (199), New Jersey (138), Rhode Island (125), Illinois and New York. The count is not adjusted for population or housing stock, so these are places where the strategy is used, not where it pays best.
The rules that decide whether you qualify
The data say what buyers did. The programs say what a lender may approve. Section numbers are from the documents we saved: HUD Handbook 4000.1 as transmitted by Update 18 on August 12, 2026, the Fannie Mae Selling Guide pages dated September 2, 2026 and the Fannie Mae Eligibility Matrix dated August 5, 2026.
| Rule | FHA (HUD Handbook 4000.1) | Fannie Mae conventional | VA |
|---|---|---|---|
| Units allowed | Two-unit and three- to four-unit single family residential properties (II.A.1.b.iv.(B)(2) and (3)) | Two- to four-unit principal residences are eligible for subject-property rental income (Selling Guide B3-3.8-02) | A dwelling of not more than four family units (38 CFR 36.4301) |
| Occupancy | At least one borrower must occupy within 60 days of signing and intend to stay at least one year (II.A.1.b.iii.(A)(2)(a)) | Principal residence; rent from the unit you occupy cannot be used to qualify (B3-3.8-01) | Dwelling to be owned and occupied by the veteran as a home (38 U.S.C. 3710(a)(1)) |
| Down payment / max LTV | Maximum LTV on purchases 96.5%, minimum investment 3.5% of adjusted value (II.A.2.b.ii; II.A.2.c.ii) | 95% for 2-4 units on a principal residence purchase (Eligibility Matrix, DU); 97% is for one unit; high-balance 2-unit under 85%, 3-4 unit under 75% (note 2) | Not stated in the statute or regulation we saved; the HMDA median was 100% LTV |
| Mortgage insurance | Upfront premium 1.75%, financeable (II.A.2.e.i.(A)); annual premium 0.55% for a term over 15 years, base loan up to $726,200 and LTV over 95% (Mortgagee Letter 2023-05) | Not covered here | Not covered here |
| Rent counted to qualify | 75% of the lesser of appraiser fair market rent or lease rent, added to income, with no netting against the payment (II.A.4.c.xii.(I)(2)(c)) | 75% of gross rent, minus the PITIA of the property; positive result offsets PITIA only if under 12 months of landlord experience (B3-3.8-02) | Not covered here (VA Lenders Handbook not retrievable) |
| Extra test on bigger buildings | Three- to four-unit: net rent of all units must cover PITI (II.A.1.b.iv.(B)(3)(c)); reserves of three months PITI (II.A.4.d.i.(C)(2)) | Lower LTV for high-balance loans, see above | None found in the sources saved |
The 3.5% figure is the minimum investment, and the Handbook defines it as a share of the adjusted value; the lender will also want closing costs, reserves and the FHA mortgage insurance, which is why we show them separately below. The Handbook calls the occupancy rule a requirement that a borrower occupy the property “within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.” Fannie Mae states that “rental income from the borrower’s principal residence (a one-unit principal residence or the unit the borrower occupies in a two- to four-unit property) or a second home cannot be used to qualify the borrower,” so on a conventional loan the rent that qualifies you comes from the other units only. The VA Lenders Handbook (Pamphlet 26-7) would add the veteran program’s rental-income and reserve rules, but VA’s site did not return the text to us, so we do not state them; the statute and regulation above are what we saved.
2026 loan limits for 2-4 unit homes
| Units | FHA floor (low-cost areas) | FHA ceiling (high-cost areas) | Conforming baseline (FHFA) |
|---|---|---|---|
| 2 | $693,050 | $1,599,375 | $1,066,250 |
| 3 | $837,700 | $1,933,200 | $1,288,800 |
| 4 | $1,041,125 | $2,402,625 | $1,601,750 |
FHA limits come from Mortgagee Letter 2025-23 (December 11, 2025) and apply to case numbers assigned on or after January 1, 2026; the floor is 65% of the national conforming limit of $832,750 for one unit and the ceiling is 150% of it. FHFA’s baseline for 2026 is $832,750 for one unit and $1,066,250, $1,288,800 and $1,601,750 for two, three and four units; high-cost counties and the special exception areas of Alaska, Hawaii, Guam and the Virgin Islands have higher limits that depend on the county. How much does the limit matter? In 2025, 1,849 of 11,187 FHA duplex loans (16.5%) were above the 2026 floor, so they were in counties with a higher limit; only 72 of 1,267 FHA triplex loans (5.7%) were. 1,253 of 22,134 conventional duplex loans (5.7%) exceeded the 2026 baseline for two units (our arithmetic, comparing the 2025 loan amount to 2026 limits). The median loan for every group above was far under the floor.
The FHA self-sufficiency test for 3- and 4-unit homes
FHA will insure a loan on a three- or four-unit home only if the building could carry its own payment. The Handbook’s definition: “Net Self-Sufficiency Rental Income refers to the Rental Income produced by the subject Property over and above the Principal, Interest, Taxes, and Insurance (PITI).” The standard: “The PITI divided by the monthly Net Self-Sufficiency Rental Income may not exceed 100 percent for three- to four-unit Properties” (II.A.1.b.iv.(B)(3)(c)). The calculation uses the appraiser’s estimate of fair market rent from all units, including the one you will occupy, and subtracts the greater of the appraiser’s estimate for vacancies and maintenance or 25 percent of the rent.
Three consequences follow. The unit you live in counts toward the test, because the test asks whether the building is self-sufficient, not whether you are. It does not make the rent count as your income: for qualifying, FHA adds 75% of the lesser of the appraiser’s fair market rent or the lease rent to income, and does not allow the net rent to reduce your payment (II.A.4.c.xii.(I)(2)(c)). And a duplex faces no such test: the Handbook states the self-sufficiency standard for three- to four-unit properties only. The appraisal supplies the rent, on the small residential income property form (Fannie Mae Form 1025).
Worked example: a 3-unit FHA purchase
This is an illustration with sourced inputs, not a listing. The price, rate and rents come from three different places; the arithmetic is ours (the script is check_math.py in the data folder).
| Step | Input or result | Source or arithmetic |
|---|---|---|
| Purchase price | $475,000 | HMDA 2025 median property value, FHA 3-unit purchase loans (1,267 loans) |
| Note rate, 30 years | 6.25% | HMDA 2025 median note rate, same group |
| Base loan at 96.5% LTV | $458,375 | Price x 0.965, rounded down (Handbook II.A.2.b.ii); down payment $16,625, which is 3.5% |
| Upfront MIP, financed | $8,021.56 | 1.75% of the base loan (II.A.2.e.i.(A)); total loan $466,396 |
| Principal and interest | $2,871.68 | 30-year payment on the total loan at 6.25% (our arithmetic) |
| Property tax and insurance | $593.75 + $237.50 | Our assumptions: tax 1.5% and insurance 0.6% of price a year; replace with the listing's tax bill and a quote |
| PITI | $3,702.93 | P&I + tax + insurance |
| Monthly annual MIP | $213.76 | 0.55% a year on the loan, divided by 12 (Mortgagee Letter 2023-05; approximation) |
| Rent of the three units | $5,637 | 3 x $1,879, the HUD FY2027 two-bedroom fair market rent, Providence-Fall River, RI-MA HUD Metro FMR Area (a stand-in for the appraiser's rent) |
| Net self-sufficiency rental income | $4,227.75 | Rent less 25% (no appraiser figure assumed above 25%) |
| PITI / net rent | 87.6% | Under 100%: passes |
| PITI + MIP / net rent | 92.6% | Stricter reading with mortgage insurance in the payment: passes |
The test is passed with 7.4 to 12.4 points to spare. Pushing the same building to the limit shows what breaks it: rent of $1,740.75 per unit, or a note rate of 7.25%, would bring the ratio to 100% (our arithmetic). What this buyer lives on afterwards is a different question. If the two other units rent for the fair market rent and 75% of that is counted, $2,818.50 a month comes in against $3,916.70 of PITI and MIP, leaving about $1,098.20 for the owner (our arithmetic, before utilities the landlord pays, capital repairs and any period a unit is empty), against the $1,879 the same two-bedroom rents for. FHA also requires reserves of three months of PITI after closing on a 3- or 4-unit property (II.A.4.d.i.(C)(2)): $11,108.79 here, so about $27,734 for the down payment and reserves before closing costs. To run your own numbers for the rental half, our rental property calculator takes the rent, expenses and price, and the cap rate calculator shows what the building yields.
When you move out and keep it
House hacking is often the first step of a rental portfolio. The FHA occupancy rule is tested at closing (occupy within 60 days, intend to stay one year), and the Handbook adds that FHA will not insure a mortgage designed “as a vehicle for obtaining Investment Properties” (II.A.1.b.iii.(A)(2)(b)). Whether and when you may move out is a question for your lender, not for this page. What changes afterwards is the next loan. A buyer who refinances after moving out is an investor in HMDA terms and pays the investor premium described on our investment property mortgage rates page; one who keeps the original loan keeps its rate. A loan based on the building’s rent rather than the borrower’s income is a DSCR loan: what a DSCR loan is, and how to refinance into one. Two cautions from the Handbook: a borrower who is buying a further FHA investment property may not have a financial interest in more than seven dwelling units within a two-block radius (II.A.1.b.iv.(A)(7)), and the Handbook says FHA “will not insure more than one Property as a Principal Residence for any Borrower, except as noted” in its exceptions table.
If you are deciding between this and passive ownership, compare the work and the leverage with real estate crowdfunding vs rental property.
What a first-time buyer can do with this
- Pick the program by the building. For a duplex, FHA at 3.5% down is the lowest-cash path of the programs on this page for a non-veteran; for a 3- or 4-unit, run the self-sufficiency test first. Conventional loans cost 0.25 points more in the median but borrowers put down more, and a high-balance duplex needs an LTV under 85%.
- Test the rent before you offer. Use the appraiser’s method, rent from all units less 25%, against PITI with and without mortgage insurance. The break-even in the example is a rent drop of about 7.4% per unit.
- Plan the cash, not just the down payment. Three months of PITI in reserves on 3-4 unit FHA loans, closing costs, the upfront premium (financed) and repairs the appraiser may require.
- Check the county limit. The floor is $693,050 for a duplex and $837,700 for three units; high-cost counties go higher.
- Know your exit. If you may move out within a year, the FHA occupancy intent is a representation you are making at closing. If you will keep the building as a rental afterwards, read the investor and DSCR pages before you assume the same rate.
Kiavi pays us a referral fee when a loan closes through its button in the box below. It is relevant only if you will keep the property as a rental after you move out: the HMDA figures above are the same either way. Visio Lending, also in the box, makes 30-year rental loans, the refinance step after you leave. The box is for that rental stage; it is not a list of FHA or VA lenders.
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FAQ
Loan-level data: FFIEC/CFPB HMDA Data Browser, nationwide originated loans (actions_taken=1) for conventional, FHA, VA and USDA loan types, 2024 and 2025, downloaded October 7, 2026 (request URLs in the data file; the API ignores the occupancy, lien and purpose filters, so loan purpose = home purchase, lien status = first lien, occupancy type = principal residence, closed-end, not reverse mortgage and 1-4 units were applied locally by our script dl.py; analysis in an.py and an2.py; cross-checked to the loan counts of our investment property page's owner-occupied extract). Field definitions from the FFIEC public LAR data fields and 12 CFR 1003.4. Program rules from HUD Handbook 4000.1 (Update 18, transmittal issued August 12, 2026), HUD Mortgagee Letters 2025-23 and 2023-05, the HUD release of December 11, 2025, the Fannie Mae Selling Guide B3-3.8-01 and B3-3.8-02 (September 2, 2026), the Fannie Mae Eligibility Matrix (August 5, 2026), FHFA’s announcement of November 25, 2025 and its 2026 conforming loan limit addendum, 38 U.S.C. 3710 and 38 CFR 36.4301 (Legal Information Institute copies), and the HUD FY2027 Fair Market Rents file. All medians, percentiles, shares, implied down payments and payment figures are our arithmetic; the worked example is an illustration with the stated assumptions. This is analysis of public documents, not investment, legal or tax advice, and not a loan offer.
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