DSCR Direct

Can You Use FHA for Investment Properties?

The short answer: no. FHA loans are strictly for owner-occupied properties. You must live in the property as your primary residence for at least the first 12 months. FHA financing is available for 1-4 unit properties, but you have to occupy one of the units yourself.

That said, FHA can be a powerful tool for your first investment if you use the house hack strategy. Buy a duplex, triplex, or fourplex with FHA financing at just 3.5% down. Live in one unit and rent out the rest. The rental income from the other units helps cover your mortgage, and in many markets it can cover the entire payment.

The House Hack to DSCR Pipeline

Here is how smart investors use FHA as a launching pad: Buy a small multifamily with FHA at 3.5% down. Live in it for a year while the other units generate income. After 12 months, move out and refinance into a DSCR loan. Now you have a cash-flowing investment property, and you can use FHA again on your next primary residence - or go straight to DSCR for your next investment.

DSCR loans are purpose-built for investment properties. No owner occupancy required, no income verification, and no limit on how many properties you can finance. The property's rental income is all that matters. If the rent covers the payment, you qualify.

FHA for Your First House Hack, DSCR for Everything Else

If you are just starting out and plan to live in the property, FHA is a great first move - 3.5% down is hard to beat. But for every investment property after that, DSCR is what you need. No income docs, no occupancy requirement, and you can close in an LLC to protect your assets.

Use the calculator above to see what your FHA payment would look like on a house hack, then check DSCR rates for your pure investment properties.