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Duplex & Multifamily Mortgages in CT [10 Frequently Asked Questions]

Don’t let its size fool you — from bustling cities to rolling farmland, the small state of Connecticut boasts a community for every type of home buyer. But what’s it like to own a duplex or multifamily property in the Constitution State, and what loan options are available? Here, we answer some of the most common questions prospective home buyers have about multifamily mortgages in Connecticut.

1. What’s the best multifamily loan option in CT? 

Besides the standard loan options available nationwide, the Connecticut Housing Finance Authority offers a Conventional AMI Loan Program that can help offset mortgage payments and save you money on insurance. FHA, VA, USDA and conventional loans also offer affordable options to first time multifamily home buyers in Connecticut. Thirty years is the standard term for both single- and multifamily mortgages; however, it’s a good idea to check the loan limits in your desired county or town.

2. What are the benefits of buying a multifamily home in CT? 


There are many reasons to buy a multifamily property in Connecticut, not least of which is access to the natural beauty of New England year-round. Here are our top 5 reasons to buy a duplex or multifamily housing:

  • Expand your real estate portfolio
  • Generate passive income
  • Reduce your living costs
  • Improve your credit score
  • Explore the options of being an occupying owner or remote landlord
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3. What counts as a multifamily home in CT? 

To qualify for multifamily financing, a property needs to have:

  • 2 to 4 separate units (duplex, triplex, quadplex, townhouse, in-law apartment, renovated single-family home or semi-detached home)
  • A kitchen, bathroom, entrance (usually) and address/number designated for each unit
  • The ability to be owner-occupied for at least one year (this applies to FHA or VA loans only)

A property with 5 or more units qualifies as a commercial property, and falls under a different loan category.

4. What’s the best part of CT for multifamily homes?

Like much of New England, Connecticut is home to many colleges and academic institutions. And where there’s a large student population, there’s bound to be a wealth of multifamily properties. Cities like Hartford, Bridgeport and New Haven boast lots of historic multifamily homes and newer apartment complexes, as do the towns surrounding each city. One thing to note: Since southern Connecticut is a gateway to New York, home values are higher there (they increased by 8.9% in 2020 alone), and are expected to continue climbing.

5. Can I use rental income to qualify for a loan?

When applying for an FHA or conventional loan, you can count 75% of your rental income from a property you already own, or the rent you expect to receive from a future property. However, you can’t count rental income toward a VA loan Unless you have landlord experience.

6. How much do I need in cash reserves to qualify for a loan?

Depending on your loan type, you could need anywhere from three to six months’ worth of mortgage payments in liquid cash to qualify — assets like your car or other properties do not count. This is to ensure you can still make your monthly payments in the event of a loss of income.

7. How much do I need to put down if purchasing a multifamily home?

Typically, you need to put down at least 15% to buy a duplex in CT, and 20% for three- to four-unit properties — But the loan you choose could require as little as 3.5% down (0% for VA!).

8. How long do I need to stay in the home if I have an owner-occupied loan?

If you have an FHA multifamily loan, you must live onsite for at least one year. For a VA loan, the owner must live on the property for the duration of ownership. Consult your mortgage broker if you plan to vacate your unit and rent it out to a tenant. Investment property loans do not require the owner to live onsite.

9: What is a non-occupying borrower?

Say, for example, you want to purchase a multifamily home and occupy it as your primary, but your income or credit profile are not strong enough to qualify on your own. A non-occupying co-borrower is someone who will not live in the home with you, but their credit profile and income are factored into the equation to help you qualify for a mortgage.

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10. What are CT taxes like for a multifamily property?

Connecticut has the third-highest property tax rate in the country at 2.24%, compared to the 1.07% national average. While there is no transfer tax on properties below $2.5 million, any property that exceeds that sale price carries a 2.25% transfer, or conveyance, tax.

Mortgage brokers are easy to find in Connecticut’s major cities and most towns, but many rural residents borrow from banks. Blue Water Mortgage serves CT, MA, NH, ME, NC and FL, and can offer a tailored, full-service experience no matter where you are looking to buy. Fill out our contact form or call one of our offices to start exploring your investment options.

Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.

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