Buying a Multi-Family With an FHA Loan

Welcome to Voatlas. Picture a two-flat on a quiet side street, a few blocks from the train. You take the upstairs bedrooms, and you rent the downstairs unit to a friend, a cousin, or a stranger you will vet carefully. The lawn is yours, the roof is yours, and so is most of the maintenance call when something breaks. Multi-family stock in spring tends to move fast, which means more options but also more competition, so it pays to get your numbers straight before you fall in love with a porch. An FHA loan lets you buy a two-to-four unit property with as little as 3.5% down if you live in one of the units. That keeps your cash in the bank, but the trade-off is you are carrying the whole mortgage yourself until the rent shows up. The plan below is about making that rent real, in your zip code, with real numbers, and using a zero percent intro APR window to give yourself breathing room on the bigger upfront costs. The zero percent intro APR for 15 months on purchases is a timeline, not a discount. That means an annual percentage rate, which is the yearly cost of borrowing money including any fees, starts at zero for a set period. Whatever balance is still on the Discover it Cash Back card in month 15 starts accruing the regular purchase APR, and that rate is meaningfully higher than any mortgage. Pay the card off before the intro window closes or refinance the remaining balance into a lower-rate plan, which means replacing your current debt with a new loan that has a better interest rate. That is the only way this trick actually saves you money. Head over to voatlas.com for the written version of this piece along with all of our sources.