House Hacking Steps 101

[Dominic M.]

Hi BP community, 

This maybe a common discussion, yet I am unable find concrete data or someone who can share their knowledge on a second or multiple house hacks. Here we go: 

Correct me if I am wrong but, FHA loans and Freddie Mac loans require you to live in a 1-4 unit house for a minimum of 1 year, unless in specially defined circumstances. EXAMPLE: you have lived in the property for 1 year and want to rent it out. You house hack a second property and live in that property for a year, and repeat.

What are the implications and your options for the original loan? Can you get a second FHA or Freddie Mac loan with 3-3.5% down? What is your best strategy for multiple house hacks?

[John Williams]

I am not positive but I think you can only have one FHA loan in your name at one time. Perhaps refinancing into a conventional loan at the one-year mark could solve this problem?

If you can't refinance after one year and re-use the FHA loan, I would just try to find another loan program with a low down-payment option. I have heard of 10% down programs for primary residences. I bet you could find someone who would do it for 5% down.

I would just save, save, save that first year. Try to build a substantial down payment. I have been house hacking with the VA loan since 2017 using a similar strategy. With the VA Loan, you can have have more than one out at a time. This is a great (and underused) benefit for many Veterans.

I hope that helps!

-John Williams

Investor from Clarksville, TN