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A Guide to Duplex & Multifamily Loans in NC [Plus 9 Tips]


North Carolina is truly a state that has it all. From the urban cities bursting with life to the sunny and relaxing coastline, North Carolina has something for every type of home buyer. Multifamily properties are common throughout the entirety of the state, especially because of the numerous colleges/universities and growing industry hubs.

Investing in a multifamily is a particularly lucrative route for first time home buyers: You can earn a passive income, build your credit and expand your real estate portfolio all at once. Terms and rates can vary by state, county and town, so it pays to do your research.

North Carolina offers a host of multifamily properties with attractive loan options to match. Read on for a comprehensive beginner’s guide to buying a multifamily home in the Tar Heel State.

What is Considered a Multifamily Home?

A multifamily home is defined as a residential building in which two to four families or tenants can live separately. This includes duplexes, triple-deckers and four-unit apartment buildings – anything with five or more units is considered a commercial property and has different loan requirements.

To qualify for a multifamily mortgage loan, each unit of the property must have its own:

  • Kitchen
  • Bathroom
  • Entrance/exit (usually)
  • Address/unit number

The terms of each multifamily mortgage will determine if the owner of a multifamily property must occupy one of the units and rent out the others or if they can live off site and collect rent remotely. As a multifamily home buyer, you have the option to live on site for the duration of their loan terms, then flip the property and turn it into an investment. Either way, the owner is responsible for managing all repairs, maintenance and utilities for their property.

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Multifamily Loan Options in NC

Here are the five most popular loan options and their basic terms for multifamily properties in North Carolina:

Federal Housing Administration (FHA) Loan

  • As low as 3.5% down payment
  • Building must be owner occupied
  • Loan cap of $1,548,100

Department of Veterans Affairs (VA) Loan

  • For veterans, active military personnel and surviving spouses
  • Require $0 down
  • Building must be owner occupied
  • Owners must have prior landlord experience to use rental income for mortgage payments

Conventional Loan

  • Freddie Mac & Fannie Mae
  • Stricter terms than government-backed loans
  • Home Possible by Freddie Mac offers a low down payment of 5%, provided owner occupies one unit, and their income cannot exceed 80% of the Area Median Income (AMI)
  • HomeReady by Fannie Mae offers a low down payment of 3% and offers non-occupying co-borrower flexibility

Commercial Mortgage-Backed Securities (CMBS)

  • No commercial space restrictions
  • Can be used for mixed-use properties

If you’re considering investing in a multifamily property in North Carolina, Blue Water Mortgage has all the answers you need to begin exploring your options. Contact us today.

Pros and Cons of Buying a Multifamily Home

The Pros

There are numerous advantages to owning a multifamily property in North Carolina. The benefits of owning a duplex or multifamily property in NC include:

  • The ability to generate a passive cash flow.
  • An improvement to your credit score.
  • The opportunity to take advantage of attractive loan options and financial assistance.
  • The choice between living on site or being a remote landlord.
  • Assistance in closing a home sale, provided you can guarantee rental income.
  • Providing you access to a multitude of communities and landscapes, from oceanside villages to industrial hubs and everything in between.
  • Expanding your asset portfolio.
  • Possibly allowing you to write off home repairs as business expenses.
  • Enabling you to flip the property into an investment after a period of time.
  • Reducing your living costs, since mortgage rates for multifamily homes don’t increase as much over time as single-family rates.

The Cons

As with every investment, there are certain risks and notable downsides. Some of the hurdles you may encounter when owning a duplex or multifamily property in North Carolina include:

  • More expenses than owning a single-family home.
  • More time and more maintenance to care for the units.
  • More inherent complications (i.e., strange occurrences, one bad tenant impacting other renters).
  • Competition from experienced investors.
  • Stricter regulations for landlords.
  • Costly upkeep, especially on older or historic buildings.
  • Higher tenant turnover due to large student and temporary worker population.
  • Loss of income due to vacancies.

If you have any questions about buying a duplex or multifamily home in North Carolina, connect with one of our experienced mortgage brokers today.

The Best Parts of NC to Buy a Multifamily Home

It is well-known that North Carolina is home to some of the best college towns in the country. Durham – home to Duke University and NC Central University – is a hot spot for student housing and recent graduates. Just eleven miles away lies Chapel Hill, known for the highly reputable University of North Carolina.

Any former or current industry hub is going to offer a variety of multifamily properties to choose from, and North Carolina is no exception. Charlotte is the biggest city in NC with the largest influx of millennials in the country, making it an extremely attractive option to buy a multifamily home. The city’s metro continues to see explosive growth, increasing the demand for affordable housing. Other cities such as Raleigh or Durham are affordable to live in and boast industry hubs for research, healthcare, education and IT.

If you’re considering investing in a multifamily property in North Carolina, Blue Water Mortgage has all the answers you need to begin exploring your options. Contact us today.

NC Tax Rate on Multifamily Homes

North Carolina’s property taxes are relatively low compared to other states at 0.77%, well below the 1.07% national average.

Top 9 Tips for Duplex and Multifamily Home Buyers in NC

Know what qualifies as a multifamily property in North Carolina

  • Explore all your multifamily loan options
  • Property types vary greatly in North Carolina
  • Keep an eye on your savings
  • Make sure you know which income you can use to qualify for a loan
  • Remember that North Carolina is a title state
  • It helps to be handy (or know someone who is)
  • Decide what kind of borrower you will be
  • Plan for your (and your home’s) future


If you have any additional questions about multifamily mortgage loan requirements in North Carolina, talk to one of our experienced mortgage brokers today. Our team has 150 years of combined experience helping clients find the best mortgage solution for your unique needs.

Roger Odoardi

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.