From the RatesQ team · Sample question

What is the minimum down payment for an investment property?

This educational scenario and its sample explanations are not posts from real users.

I want to buy a duplex as my first investment. I plan to live in one unit and rent the other. Does that change the down payment requirement vs buying a pure investment property?

Quick Summary

  1. Occupancy and number of units affect down-payment and underwriting rules.
  2. Owner-occupied and investment-property programs have different requirements.
  3. Rental income treatment and required reserves depend on the loan program.

Sample explanations

From the RatesQ team

Yes, living in one unit makes a huge difference. A duplex where you occupy one unit is classified as an owner-occupied primary residence for financing purposes. That means you can use FHA with 3.5% down or conventional with as little as 5% (though 15-20% is common for 2-unit). For a pure investment property where you don't live there, you're typically looking at 15-25% minimum.

From the RatesQ team

Owner-occupied 2–4 unit is one of the best financing opportunities in real estate. FHA on a 2-unit: 3.5% down with 580+ credit, and you can use a portion of the rental income to help you qualify (75% of market rent per FHA guidelines). Conventional on a 2-unit: typically 15% down if using the second unit's rental income, or 5% if not including rental income in qualifying. One thing to plan for: you'll need 6 months of reserves (post-close) for multi-family regardless of loan type in most cases.

From the RatesQ team

House hacking is genuinely underrated. I did this with a duplex 3 years ago. The rent from the other unit covers most of my mortgage. Made the whole homeownership thing affordable. Just make sure you're okay being a landlord for your neighbor — proximity can get complicated.