House hacking is buying a small multifamily property (2–4 units), living in one unit, and renting the others. Done correctly, rental income covers your mortgage — you live for free or near-free while building equity. It's the most accessible path to real estate investing for people without significant capital.
The financing advantage of house hacking
| Property type | Down payment (investment) | Down payment (owner-occupied) |
|---|---|---|
| Single family | 20–25% | 3–5% (conventional) |
| 2–4 unit (duplex, triplex, quad) | 20–25% | 3.5% FHA / 5% conventional |
FHA loans allow 3.5% down on 2–4 unit properties if you live in one unit. On a $400,000 duplex: $14,000 down vs $80,000–$100,000 as a pure investment. You're getting investment financing at homeowner prices.
The cash flow math
Example: $420,000 duplex in a mid-tier market. 5% down ($21,000) at 6.8% on $399,000 loan:
- Monthly mortgage PITI: ~$3,100
- One unit market rent: $1,500/month
- Your effective housing cost: $1,600/month
- Equivalent apartment rent in same area: $1,800–$2,200/month
You're paying less than market rent while building equity and owning an appreciating asset. In higher-rent markets: rental income may exceed the mortgage entirely.
FHA house hacking requirements
- Must occupy one unit as primary residence for at least 1 year
- Credit score: 580+ for 3.5% down; 500–579 for 10% down
- Mortgage Insurance Premium (MIP): 1.75% upfront + 0.55%/year
- Property must be in livable condition (FHA minimum property standards)
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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