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Buying 2-4 Unit Properties in Florida: Understanding Your Options

Buying a property with 2-4 units in Florida can be a smart move, giving you a place to live and a way to earn money from rent.

However, getting a loan for this kind of purchase involves knowing a lot of rules from different lenders.

This guide breaks down those rules in an easy-to-understand way, covering everything from loan types to how much money you need to start.

It's designed to help anyone in Florida looking to invest in property, whether you're new to this or already own real estate.

Program Types For Financing 2-4 Unit Properties

When buying a 2-4 unit property in Florida, you'll come across various agency mortgage programs. Each program is designed with specific borrowers in mind, offering unique benefits.

Here's a breakdown of the most common types:

Fannie Mae: Fixed Rate & ARMs, HomeReady®

Fannie Mae offers fixed-rate and adjustable-rate mortgages (ARMs) for owner-occupied and investment properties.

Their HomeReady® program is tailored for low- to moderate-income borrowers who require a lower down payment and offer flexible funding options.

Freddie Mac: Fixed Rate & ARMs, Home Possible®

Similar to Fannie Mae, Freddie Mac provides fixed- and adjustable-rate options.

The Home Possible® program helps borrowers with low to moderate incomes or first-time homebuyers achieve homeownership with as little as 3% down.

FHA: Standard 203b, 203k Renovation Loan

The FHA's standard 203b loan offers owner-occupiers a low down payment option.

Their 203k renovation loan is unique, allowing buyers to finance the purchase and the cost of repairs or renovations with a single loan.

VA: Fixed Rate & ARMs, Cash Out Refi

VA loans offer several benefits for veterans and active military members, including 100% financing on purchasing 2-4 unit properties, provided one of the units will be owner-occupied.

VA loans also offer options for cash-out refinancing.

An illustration emphasizing the benefits of investing in multi-unit properties

What Are The LTV Requirements and Minimum Borrower Contributions for 2-4 Unit Properties?

When you're considering buying a property in Florida with 2-4 units, understanding how much loan you can get compared to the property's value (LTV) and how much money you need to start (minimum borrower contributions) is key.

Different agencies have different rules.

Fannie Mae and Freddie Mac

To buy a place to live in (owner-occupied), you can borrow up to 95% of the property's value, which means you only need to put down 5%.

But, if you want to take cash out of your property's value or buy it as an investment, the amount you can borrow drops to 75% or less, so you'll need to put down more money.


FHA is a bit more generous. They let you borrow up to 96.5% for buying, so your starting money can be as low as 3.5% of the property's price. If you have a lower credit score or buy in a special situation, this might change slightly.


For those who've served in the military, VA loans can cover 100% of the purchase price for up to a 4-unit property, as long as you're going to live in one of the units. This means you might not need any starting money at all.

Credit Score Requirements for 2-4 Unit Properties

In Florida, when buying a property with 2-4 units, how good your credit score needs to be can change depending on who you're getting the loan from.

This credit score decides if you can get a loan and what your loan's terms might be.

Fannie Mae

Fannie Mae doesn't set a strict minimum credit score for all cases but generally looks for scores above 620. They might ask for a higher score if you're putting down less money.

Freddie Mac

Freddie Mac also starts looking at scores around 620. Like Fannie Mae, higher scores can help you get better loan conditions.


FHA is more flexible, allowing credit scores as low as 580 for you to put down as little as 3.5%. If your score is below 580, you'll need to put down more, around 10%.


The VA doesn't specify a minimum credit score, but lenders usually prefer scores of 620 or higher. The good part is, if you're eligible, you might not need any down payment, regardless of your score.

Each agency has its way of examining credit scores, which can affect how much you need to start and the terms of your loan.

Knowing your credit score and talking to lenders about what loans you might get for a multi-unit property in Florida is important.

Financial Reserve Requirements for Purchasing 2-4 Unit Properties

When buying a property with 2-4 units in Florida, apart from your down payment, you might need extra money saved up, called reserves. These reserves are your safety net to cover future mortgage payments if needed.

Let’s look at what different agencies say about this:

Fannie Mae

Fannie Mae wants you to have reserves, but the exact amount can change. Generally, for 2-4 unit properties, you might need reserves equal to 6 months of mortgage payments.

If you're refinancing and taking cash out, the requirement could increase based on your credit score and debt-to-income ratio.

Freddie Mac

Freddie Mac also requires reserves, often similar to Fannie Mae's guidelines. The specifics can vary, with the loan program and your financial situation influencing the required amount.


FHA's reserve requirements are a bit different. For 3-4 unit properties, you must have enough reserves to cover three months of mortgage payments. This makes it a bit easier for FHA borrowers, especially first-time buyers, to meet the requirements.


The VA doesn't usually ask for reserves if you're buying a property to live in one of the units. However, if you're using rental income from the other units to qualify for the loan, they might ask for reserves to cover a few months of payments.

Having enough reserves is crucial for getting a loan for a multi-unit property in Florida. It shows lenders that you can handle unexpected expenses and keep making payments, reducing their risk.

Specific Occupancy Rules for 2-4 Unit Properties

Buying a property with 2-4 units in Florida means understanding the rules about who needs to live in one of the units. These rules can affect your loan options and terms.

Fannie Mae and Freddie Mac

For loans from Fannie Mae and Freddie Mac, you're allowed to rent out the other units if you're buying the property as your main home.

But, you must live in one of the units to qualify for the best loan conditions. This helps you get a lower down payment and better interest rates.


FHA loans are similar. They let you buy a 2-4 unit property with a low down payment, but you need to live in one of the units as your main home. This rule makes sure the loan supports homeowners, not just investors.


The VA is strict about occupancy. If you're getting a VA loan, you must plan to live in one of the units as your main home. This rule is part of the VA's goal to help veterans find homes, not just investments.

These occupancy rules ensure that these loan programs help people find homes, not just make money. If you're planning to buy a multi-unit property in Florida, consider where you'll live and how that affects your loan choices.

Can You Use Rental Income From The Property in The Loan Application?

For many buyers in Florida looking into 2-4 unit properties, the potential rental income from additional units can play a big part in their purchasing decision.

How this income is considered in the loan application process varies by agency.

Fannie Mae

Fannie Mae allows rental income from the property you're buying to count towards your income, which can help you qualify for a larger loan.

However, you might need a history of being a landlord unless you're living in the property and can manage it yourself.

Freddie Mac

Freddie Mac also considers rental income in its loan approval process.

They may require you to have some landlord experience or take a landlord education program, especially if you're a first-time homebuyer.


The FHA is more lenient with rental income, particularly for 2-4 unit properties where you plan to occupy one of the units.

They'll consider the potential rental income from the other units, but you'll need to prove that the income is stable and likely to continue.


For VA loans, using rental income to qualify is possible, but there are specific guidelines.

You may need to show that you have experience managing property or have a plan for managing the units you intend to rent out.

In all cases, lenders will look at the stability of the rental income and your ability to manage the property effectively.

For buyers in Florida, this means that rental income can significantly impact their loan application, but they'll need to meet the specific requirements set by their lender.

Guidelines for Non-Occupant Co-Borrowers

In Florida, buying a 2-4 unit property often involves a significant financial commitment, and some buyers consider adding a no-occupant co-borrower to their loan application to strengthen it.

Each agency has specific rules about this practice.

Fannie Mae

Fannie Mae allows non-occupant co-borrowers to both purchase and refinance loans. This can greatly help, especially if the primary borrower's income or credit isn't strong enough.

The co-borrowers income can be added to the primary borrower's, potentially qualifying them for a larger loan.

Freddie Mac

Freddie Mac also permits non-occupant co-borrowers on loans.

This flexibility can make it easier for borrowers to get approved by pooling resources with family members or close associates who won't live in the property.


The FHA is particularly friendly towards non-occupant co-borrowers.

They allow their income to be considered part of the qualifying process, which can be crucial for first-time buyers or those with limited income.

It's a great way to get into a multi-unit property to live in one unit and rent out the others.


VA loans, aimed at service members, veterans, and their families, typically do not allow non-occupant co-borrowers unless the co-borrower is the veteran's spouse.

This restriction is based on the VA's goal of providing housing benefits directly to veterans and their immediate family members.

Understanding these guidelines is key for potential buyers in Florida when considering adding a non-occupant co-borrower to your loan application.

This strategy can open doors to larger loans or better terms, especially if you're pooling resources with someone who won't be living in the property.

Bottom Line

Buying a property with 2-4 units in Florida means learning a lot about loans and what lenders want. You've learned about the different loan programs, how much you need to put down, and how lenders view rental income.

Are you ready to find your perfect property and make Florida your home? Check out MakeFloridaYourHome for help and expert tips on buying your next place.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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