Updated October 2026 by Texas Made Mortgage, Frisco, TX.
Quick answer: If you live in one unit, a 2 to 4 unit property is a primary residence, which unlocks low down payments. Since late 2023 Fannie Mae allows 5% down on owner-occupied 2, 3 and 4 unit homes; FHA allows 3.5% down but applies a self-sufficiency test on 3 and 4 units; VA allows zero down on up to four units for eligible veterans. The 2026 conforming limits are $1,066,250 for two units, $1,288,800 for three and $1,601,750 for four, the same in every Texas county. Lenders count 75% of the other units' rent toward your income, which is what makes the payment work.
What are the loan options for an owner-occupied 2 to 4 unit?
Conventional (Fannie Mae): 5% down on 2 to 4 units for a primary residence, standard purchase or HomeReady, with six months of reserves typically required. No self-sufficiency test.
FHA: 3.5% down with a 580 score. On 3 and 4 units the property must pass the self-sufficiency test: 75% of the total market rent for all units (including yours) must cover the full PITI payment.
VA: Zero down for eligible veterans with full entitlement, up to four units, with the veteran occupying one. No monthly mortgage insurance.
Jumbo and non-QM: For properties above the limits or investors who will not occupy.
How does rental income count toward qualifying?
The appraiser completes a rent schedule for the units you will not occupy. Lenders use 75% of that market rent (the 25% haircut covers vacancy and maintenance) as income, or the existing leases if lower. Example: a Fort Worth fourplex where the three rented units draw $1,500 each: $4,500 × 75% = $3,375 a month added to your income. With a $4,800 total payment, your own share is effectively about $1,425, often less than renting a one-bedroom.
What is the FHA self-sufficiency test?
On 3 and 4 unit FHA purchases, 75% of the gross rent for all units, including the one you occupy, must be at least the full monthly payment. Fourplex with four units at $1,400 each: $5,600 × 75% = $4,200. If PITI is $4,100 the property passes; at $4,400 it fails and the deal needs more down or a conventional loan, which has no such test. Duplexes are exempt from the test.
What are the 2026 loan limits for multi-unit homes?
One unit: $832,750
Two units: $1,066,250
Three units: $1,288,800
Four units: $1,601,750
Texas has no high-cost counties, so these apply statewide. FHA multi-unit limits are lower and vary by county; the DFW counties sit above the national floor. Our loan limits page has the county table.
Where do house hackers buy in Texas?
Older neighborhoods with legal duplexes and fourplexes: Oak Cliff and East Dallas, near TCU and the Near Southside in Fort Worth, Denton near UNT, College Station, the near-east side of Austin, and San Antonio's Monte Vista and Beacon Hill. Frisco and Plano have few small multifamily properties; most North Texas house hacking happens inside the loop or in college towns. Confirm zoning and that all units are permitted; an unpermitted unit cannot be counted.
What does the lender check that a single-family buyer never sees?
The appraiser's rent schedule and operating income statement.
Existing leases, deposits and whether tenants are month to month.
Separate utility meters and legal unit count.
Reserves: six months of the full payment on the conventional 5% program.
Your intent to occupy one unit within 60 days and for at least a year.
Frequently asked questions
Can I use gift funds for the 5% down?
Yes on a primary residence. Document it like any gift.
Do I need landlord experience to count the rent?
Not on owner-occupied 2 to 4 unit purchases under conventional or FHA rules.
Can I move out after a year and keep the loan?
Yes. Occupy for the first year, then the property can become a full rental with the same loan in place.
Looking at a duplex or fourplex in DFW or a college town? Talk to a loan officer at Texas Made Mortgage in Frisco or call 817-567-8014 and we will run the rent math and the self-sufficiency test before you offer.
Texas Made Mortgage, NMLS #2676326. This article is general education, not a commitment to lend or an offer of credit. Payment examples are illustrative. Agency guidelines and limits change annually. All loans subject to credit approval. Equal Housing Opportunity.
