Duplex & Multifamily Loans in FL: What You Need to Know

There are several standard loan options available throughout the U.S., but it pays to research state-specific loan options when you’re thinking of buying across state lines. As long as you meet the standard loan requirements, you should have no problem finding a loan option that will work for you, including:

• Federal Housing Administration (FHA) Loan: FHA multifamily loans are available nationwide and can be a smart choice for first-time buyers. With a credit score of 580 or higher, you may qualify with as little as 3.5% down to purchase a property with up to four units — as long as you or a co-borrower live in one of them for at least a year. In Florida, the 2025 FHA loan limits for single-family homes starts at $524,225 in most counties and goes up to $967,150, in Monroe County. Keep in mind that FHA loans aren’t designed for investment-only properties.

• Department of Veterans Affairs (VA) Loan: VA loans require no down payment and are designed for veterans, active service members and eligible surviving spouses. With this type of loan, you can buy a property with up to four units, as long as you live in one of them. If you’d like to use rental income from the other units to help qualify for the loan, most lenders look for at least two years of landlord experience. Florida offers a Community Heroes loan with similar benefits, created for civil service professionals like healthcare workers, police officers, firefighters and educators.

• Conventional Loan: Enter Fannie Mae and Freddie Mac. The most common type of loan, these non-government-backed options have slightly stricter guidelines than either FHA or VA loans. But there are perks for each:

• Fannie Mae and Freddie Mac both now allow as little as 5% down on a 2-4 unit multi family purchase, primary residence, without any income first time home buyer restrictions. This is a big step in the right direction to make homeownership more affordable for people who want to purchase a multifamily and live in one of the units.

• Fannie Mae will also provide up to 3% cash assistance toward closing costs as part of their HomePath first time buyer program. Borrowers (or at least one co-borrower) need to complete the HomePath education course.

• United States Department of Agriculture (USDA) Loan: This loan assists mid- to low-income home buyers who live in suburban or rural areas. The USDA offers interest rates as low as 1%, and applicants can qualify with a minimum credit score of 640.

Florida also offers several state-specific loan options and cash assistance programs:

Florida Assist Loan Program

• Helps first-time buyers by offering 30-year fixed-rate mortgages through approved lenders across the state.
• 0% interest
• Up to $10,000 on FHA, VA, USDA and Conventional Loans
• No-interest loan with no monthly payments, but you’ll pay it back in full when you sell, refinance or pay off your home.

Florida First

• Available to first-time homebuyers and veterans (or anyone buying in a federally designated target area)
• Low fixed-rate first mortgage
• $7,500 for Florida Housing down payment and closing cost assistance
• Can be paired with other Florida Housing programs for added savings
• Must be used for a primary residence

Florida Advantage

• Designed for borrowers with a disabled household member
• Borrowers must earn <80% the area media income (AMI)
• Borrowers qualify for Florida Housing cash assistance

State Apartment Incentive Loan

• 0% interest if 80% of residents are farmworkers, commercial fishermen or homeless
• 20% of units must be reserved for families earning <50% AMI

If you’re looking into building your own multifamily property, the Sunshine State offers incentives for developers of low-income, multifamily housing.

In Florida, properties with two to four units count as multifamily housing. To qualify for a multifamily loan, the property needs to:

• Have two to four separate units — this includes duplexes, triplexes, quadplexes, townhouses, renovated single-family homes or semi-detached homes such as garage apartments
• Give each unit its own kitchen, bathroom, entrance and address or unit number
• Be your full-time residence for at least one year, unless it’s an investment-only property

If you have any questions about buying a duplex or multifamily home in Florida, get in touch with one of our experienced mortgage brokers.

With owner-occupied loans, at least one owner or co-borrower has to live onsite for a set period of time.

Investment properties, on the other hand, can be managed by landlords who live elsewhere, often with help from a property management company.

Most government-backed loans, like FHA and VA, require the owner to live in the property for at least part of their ownership — sometimes that can even be a co-borrower or a child of the borrower. Living onsite also means taking responsibility for maintenance and repairs, either by handling them yourself or working with a professional.

Once you move out and keep collecting rent, the property is treated as an investment. Investors usually qualify through conventional loans. In Florida, many lenders want to see prior landlord experience before approving an investment loan.

First-time buyers can often start with an owner-occupied multifamily home and later transition it into an investment property after meeting the occupancy requirement.

When applying for an FHA or conventional loan, you may be able to count up to 75% of your documented rental income — whether from a property you already own or from a property you plan to rent — when qualifying for the loan, provided that income is properly documented and adjusted for market rent.

Under FHA rules, that 75% is applied to the lesser of the lease rent or the appraiser’s estimate of fair market rent, to allow for vacancies and repair costs. For 3- and 4-unit properties, that adjusted rental income must also pass FHA’s self-sufficiency test.

Calculate that by taking the total rent your units could bring in each month, then multiply it by 75% to account for vacancies and expenses. If that number covers your mortgage payment, you meet the self-sufficiency test.

In conventional lending, many lenders use a similar multiplier, but the allowable percentage and documentation requirements can vary widely depending on the lender, the borrower’s experience and local underwriting practices. Always check with your lender to confirm their specific policy.

Besides your existing, traditional income — such as from your job or business — you can use rental income to qualify for a multifamily mortgage loan in Florida.

Q: Where in Florida should I look for multifamily homes?
A: When it comes to real estate, anything oceanside is generally going to be more of an investment up front than a landlocked property. Luckily, Florida is home to many university towns and industrial hubs with very reasonable housing costs. Look around Tampa, Orlando or Jacksonville for affordable multifamily properties and booming rental markets.

Q: How much do I need in savings to qualify for a multifamily loan?
A: Besides your closing costs and fees, you will need to prove you have enough funds left over to put your mortgage lender at ease, in case of a loss of income. Depending on your loan type, you could need anywhere from three to six months’ worth of mortgage payments in cash reserves — assets like your car or other properties do not count.

Q: How do I finance a duplex or multifamily home?
A: Multifamily financing options vary between owner-occupied and investment property loans. Multifamily mortgages work a lot like single-family mortgages, with 30 years being the standard term. However, there is a national cap on loan rates. Be sure to check state and county caps as well.

Q: Can I use rental income to qualify for a loan?
A: Yes, but with conditions. You can use both current and projected rental income to qualify for FHA and conventional loans, as long as the income is properly documented and/or appropriately adjusted for market rent rates. However, this is not allowed under a VA loan.

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

Q: What is a non-occupying borrower?
A: A non-occupying borrower is someone who helps you qualify for a mortgage but does not live in the home. For example, if you want to buy a multifamily home as your primary residence but your income or credit isn’t strong enough on its own, a non-occupying co-borrower can contribute their income and credit profile to help you qualify.

Blue Water Mortgage is your trusted expert, no matter where you’re looking to invest. We’re proud to deliver personalized, professional service backed by years of experience. Contact us today to start exploring your options.