You can use a conventional loan to buy a duplex, triplex or fourplex, but whether you actually live in one of those units makes a big difference as to what down payment you'll need to qualify.
That's because buying a rental property versus a primary residence brings very different qualification requirements.
With eligible automated underwriting, conventional home loans can finance an owner-occupied 2- to 4-unit property at up to 95% loan-to-value, or 5% down. A conventional 2- to 4-unit investment-property purchase is generally limited to 75% LTV, or at least 25% down.
Fannie Mae and Freddie Mac treat properties with up to four units within their single-family mortgage frameworks. A property with five or more units falls outside those one-to-four-unit conventional guidelines and is generally financed through a different multifamily or commercial lending program.
Conventional 2- to 4-Unit Property Basics
| Requirement |
Owner-Occupied |
Investment Property |
| Property size |
2 to 4 units |
2 to 4 units |
| Maximum purchase LTV |
Up to 95% with eligible automated underwriting |
Up to 75% |
| Minimum down payment at maximum LTV |
5% |
25% |
| Occupancy |
At least one borrower uses the property as a principal residence |
No borrower occupies the property as a principal residence |
| Rental income |
Eligible income from the other units may be considered |
Eligible rental income may be considered |
| Fannie Mae DU reserves |
6 months for a 2- to 4-unit principal residence |
6 months, plus possible additional reserves for other financed properties |
| Mortgage insurance |
Generally required above 80% LTV |
Maximum LTV is 75%, so standard borrower-paid MI is generally not triggered by LTV |
| Pricing |
Depends on borrower and loan characteristics |
Agency pricing adjustments may apply for investment-property characteristics |
Owner-Occupied vs. Investment Property Financing
The same building can have very different conventional financing requirements depending on how you plan to use it.
If you buy a duplex, triplex or fourplex and occupy one unit as your principal residence, the transaction can qualify under owner-occupied conventional guidelines. This is the financing structure commonly associated with house hacking.
If you do not plan to occupy any unit, the property is generally treated as an investment property instead.
That distinction changes the maximum LTV. Fannie Mae's current Desktop Underwriter eligibility matrix allows up to 95% LTV on eligible 2- to 4-unit principal-residence purchases, while 2- to 4-unit investment-property purchases are limited to 75% LTV.
Fannie Mae's eligibility resources provide the current agency matrices.
Freddie Mac similarly permits up to 95% LTV on qualifying 2- to 4-unit principal-residence loans receiving the applicable automated-underwriting result. Manually underwritten loans can have lower LTV limits.
Your stated occupancy must reflect how you actually intend to use the property. Mortgage occupancy requirements distinguish principal residences from investment properties because the underwriting and pricing rules differ.
Conventional Loan Requirements for 2- to 4-Unit Properties
A conventional multi-unit mortgage is not approved based on the unit count alone. The lender still evaluates your credit, income, assets, debts and the property.
Credit
There is no single credit-score minimum that accurately describes every conventional 2- to 4-unit mortgage.
Freddie Mac states a minimum Indicator Score of 620 for its standard 2- to 4-unit product unless another Guide provision applies. Fannie Mae requirements vary based on factors including the underwriting method, LTV and DTI.
For example, Fannie Mae's manual-underwriting matrix can require scores above 620 for multi-unit loans at higher LTVs.
This is why a blanket statement that every conventional borrower needs a 620 score can be misleading. Conventional loan qualification depends on the overall loan file and the applicable agency requirements.
Debt-to-Income Ratio
DTI limits also depend on how the loan is underwritten.
Fannie Mae allows a maximum total DTI of 50% for loans underwritten through Desktop Underwriter. Its manually underwritten loans generally start with a 36% maximum, with certain eligible files permitted up to 45%.
Freddie Mac allows Loan Product Advisor to determine the qualifying DTI for automated files, while its manually underwritten 2- to 4-unit product generally caps DTI at 45%.
The maximum allowed by an agency does not mean every borrower with that DTI will qualify.
Income and Assets
You need sufficient documented income and assets to satisfy the applicable underwriting requirements.
The lender may also be able to use qualifying rent from units you will not occupy, which can materially change the DTI calculation.
Requirements by Unit Count
The basic LTV treatment is now similar across owner-occupied duplexes, triplexes and fourplexes when the loan is eligible for automated underwriting.
| Property |
Owner-Occupied Maximum LTV |
Owner-Occupied Minimum Down Payment |
Investment Maximum LTV |
Investment Minimum Down Payment |
2026 Baseline Conforming Loan Limit |
| Duplex |
Up to 95% |
5% |
75% |
25% |
$1,066,250 |
| Triplex |
Up to 95% |
5% |
75% |
25% |
$1,288,800 |
| Fourplex |
Up to 95% |
5% |
75% |
25% |
$1,601,750 |
The 95% owner-occupied maximum assumes an eligible automated-underwriting transaction. Manual underwriting can have lower limits.
The Federal Housing Finance Agency sets conforming loan limits annually. FHFA's 2026 limits set the baseline at $1,066,250 for two units, $1,288,800 for three units and $1,601,750 for four units. Higher limits apply in designated high-cost areas.
The financing details also change as the number of units increases. The individual guides to buying a duplex, buying a triplex and buying a fourplex break down those differences.
Down Payment Requirements
The conventional down payment difference between an owner-occupied and investment-property purchase is substantial.
At the current maximum LTV, an eligible owner-occupied 2- to 4-unit property can require 5% down.
A 2- to 4-unit conventional investment property is limited to 75% LTV, which means a minimum 25% down payment.
Example: $600,000 Fourplex
| Occupancy |
Maximum LTV |
Minimum Down Payment |
Down Payment on $600,000 |
| Owner-occupied, eligible automated underwriting |
95% |
5% |
$30,000 |
| Investment property |
75% |
25% |
$150,000 |
That is a $120,000 difference in minimum down payment before closing costs and reserves.
The lower owner-occupied down payment does come with additional considerations. A conventional loan above 80% LTV generally requires mortgage insurance, and multi-unit purchases can require minimum borrower contributions from your own funds.
Under Fannie Mae's standard gift policy, a 2- to 4-unit principal-residence purchase above 80% LTV generally requires the borrower to contribute at least 5% from their own funds before gifts can supplement other costs. HomeReady has separate rules and can reduce the required personal contribution in eligible transactions.
Fannie Mae does not permit personal gift funds for an investment-property purchase.
How Rental Income Can Help You Qualify
One of the major differences between buying a single-family home and an owner-occupied multi-unit property is that eligible rent from the other units can potentially be considered in underwriting.
Fannie Mae's current policy allows rental income from a 2- to 4-unit principal residence, subject to documentation and rental-income eligibility requirements.
For a purchase, Fannie Mae's rental-income policy generally starts by multiplying documented gross monthly rent by 75%. The remaining 25% accounts for factors such as vacancy and operating expenses.
Example: Owner-Occupied Triplex
Assume you buy a triplex and occupy one unit. The other two units have documented qualifying rents of $1,900 each.
| Calculation |
Amount |
| Gross rent from two units |
$3,800 |
| 75% of gross rent |
$2,850 |
| Monthly PITIA for the property |
$4,200 |
| Adjusted net rental income |
-$1,350 |
Under Fannie Mae's method, the $2,850 of net rental income offsets part of the $4,200 property payment, leaving a $1,350 negative amount to account for in qualifying.
The treatment can differ depending on your rental-property management history. Under Fannie Mae's September 2026 policy, a borrower with less than 12 months of rental-property management experience generally cannot use positive adjusted net rental income from the subject property as additional qualifying income. Positive rental income can instead offset the property's PITIA. A borrower with at least 12 months of qualifying management experience may have more flexibility to use positive adjusted net rental income.
The lender also has to document the rent using the applicable appraisal and lease information. The full scheduled rent is not automatically added to your income.
Reserve Requirements
Multi-unit conventional loans can require more cash after closing than a typical one-unit owner-occupied mortgage.
For Fannie Mae loans underwritten through Desktop Underwriter, Fannie Mae requires six months of reserves for a 2- to 4-unit principal residence.
Fannie Mae also requires six months of reserves for an investment-property transaction.
If you own additional financed properties, an investment-property purchase can trigger additional reserve requirements based on the aggregate unpaid mortgage balances of those properties.
Reserves are assets remaining after closing. They are generally measured in months of the property's principal, interest, taxes, insurance and applicable association dues or similar housing expenses.
Freddie Mac reserve requirements can differ depending on the product and Loan Product Advisor result, so do not assume the Fannie Mae six-month rule applies identically to every conventional loan.
Property Requirements
Fannie Mae purchases conventional mortgages secured by residential properties with one to four units.
A legal duplex, triplex or fourplex therefore remains within the conventional single-family mortgage framework even though it contains multiple residences.
The Appraisal Must Reflect the Unit Count
The appraisal needs to identify the property as the appropriate 2-, 3- or 4-unit property and evaluate its value and rental characteristics.
Fannie Mae generally does not offer its appraisal-waiver options on 2- to 4-unit properties, so borrowers should expect a property appraisal as part of this type of transaction.
Accessory Units Are Different
An accessory dwelling unit does not automatically turn a one-unit property into a duplex.
Fannie Mae defines a one-unit property with an ADU as a one-unit property unless another policy specifically states otherwise.
That distinction can affect the LTV, appraisal and rental-income rules.
Legal and Zoning Issues Matter
The lender and appraiser need to evaluate whether the property and its current use meet applicable agency and legal requirements.
An unpermitted conversion, unsupported unit count or other property issue can complicate conventional financing. Separate utility meters are not themselves a universal conventional requirement, but the overall property configuration must be acceptable for the appraisal and loan program.
Conventional Financing by Property Type
Duplex
A duplex has two residential units.
If you occupy one, an eligible conventional loan can reach 95% LTV through automated underwriting. The rent from the second unit may potentially be considered in qualifying.
A non-owner-occupied duplex is treated as an investment property and is generally capped at 75% LTV.
Triplex
A triplex provides two potential rental units when you occupy the third.
The financing can still reach 95% LTV under eligible automated conventional underwriting, but the lender must account for the property's larger payment, reserve requirements and rental-income documentation.
Fourplex
A fourplex is the largest residential property that falls within the standard one-to-four-unit Fannie Mae and Freddie Mac framework.
An eligible owner-occupied conventional purchase can still reach 95% LTV through automated underwriting. If you do not occupy a unit, the conventional investment-property maximum is generally 75% LTV.
Conventional vs. FHA for a 2- to 4-Unit Property
FHA and conventional financing can both be used for qualifying owner-occupied 2- to 4-unit properties, but the requirements are different.
FHA can permit a lower down payment, while conventional financing can avoid FHA's upfront and annual mortgage insurance structure.
FHA also applies a self-sufficiency test to certain 3- and 4-unit properties, which can affect qualification even when the borrower otherwise qualifies.
The full FHA vs. conventional comparison for 2- to 4-unit properties breaks down those program differences.
If You Will Not Live in the Property
You do not have to occupy a duplex, triplex or fourplex to use conventional financing.
The transaction is instead underwritten as an investment property.
For a 2- to 4-unit purchase, both Fannie Mae and Freddie Mac generally cap investment-property LTV at 75%, requiring at least 25% equity at closing.
Investment-property underwriting can also involve different pricing, reserve requirements, gift-fund rules and rental-income treatment.
The conventional investment-property loan requirements cover that financing path in more detail.
How Much Cash Could You Need?
Down payment is only one part of the cash required for a multi-unit purchase.
Consider the earlier $600,000 fourplex example.
| Cash Item |
Owner-Occupied Example |
Investment Example |
| Purchase price |
$600,000 |
$600,000 |
| Minimum down payment at maximum LTV |
$30,000 |
$150,000 |
| Reserves |
Separate requirement based on applicable underwriting |
Separate requirement based on applicable underwriting |
| Closing costs and prepaids |
Additional |
Additional |
The owner-occupied transaction requires substantially less money for the down payment, but you still need to account for closing costs, prepaids and any required reserves.
A conventional mortgage calculator can help estimate the principal-and-interest portion of the payment using the actual loan amount and rate you are considering.
Bottom Line
Conventional financing can be used for duplexes, triplexes and fourplexes, but occupancy changes the requirements substantially.
An eligible owner-occupied 2- to 4-unit conventional purchase can reach 95% LTV through automated underwriting. A non-owner-occupied 2- to 4-unit investment property is generally limited to 75% LTV.
If you plan to occupy one unit, qualifying rental income from the others can potentially offset part of the property's housing expense. You should also plan for the applicable reserve requirements and confirm how the lender will document the property's rents.
FAQ
Can You Use a Conventional Loan for a Duplex?
Yes. A duplex is eligible for conventional financing as either a principal residence or investment property. Eligible owner-occupied purchases can reach 95% LTV with automated underwriting, while a conventional investment-property duplex is generally limited to 75% LTV.
How Much Down Payment Do You Need for a 2- to 4-Unit Property?
An eligible owner-occupied 2- to 4-unit conventional purchase can require as little as 5% down through automated underwriting. If no borrower will occupy the property and it is financed as an investment property, the maximum LTV is generally 75%, requiring at least 25% down.
Can You Use Rental Income to Qualify for a Multi-Unit Property?
Yes, subject to agency documentation and eligibility rules. Fannie Mae generally uses 75% of documented gross rent when calculating rental income for a subject-property purchase. How positive rental income is treated can also depend on your history of managing rental property.
What Is the Conventional Loan Limit for a 4-Unit Property?
The 2026 baseline conforming loan limit for a four-unit property is $1,601,750 in most of the United States. Higher limits apply in designated high-cost areas. FHFA sets the limits annually, so the applicable amount depends on the year and county.
Do You Have to Live in a Multi-Unit Property to Get a Conventional Loan?
No. Conventional loans can finance 2- to 4-unit investment properties as well. The difference is that owner-occupied financing can reach higher LTVs. A conventional 2- to 4-unit investment-property purchase is generally capped at 75% LTV.
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