Multifamily is considered residential since people reside in the structure. it's part of contractors license law, our testing is on it and violating can and will result in punitive actions.

@Kris TohovitisI wouldn't recommend using your cash to pay off the mortgage on your primary residence since you can likely get a better return on that money by investing it.What's your buying criteria for the multi-family property?

The main reason I ask is because that is significantly below primary residence mortgage rates let alone any investment loans, if you can get rates like that I might need to make some changes on my end hahahTo answer your original question, assuming all else is equal long-term fixed rate debt is valuable. 

Land Use Codes and Building FeasibilityExample 1: Property Land Use CodesActivity Code: 4000 (Social, institutional, or infrastructure-related)Function Code: 1000 (Residence or accommodation)Ownership Code: 4200 (State government)Example: Regrid Property Example 1Example 2: Zoning DetailsZoning Code: T3Zoning Description: Sub Urban ZoneZoning Type: ResidentialZoning Subtype: Single FamilyOwnership Code: 1500 (Businesses and commercial entities)Example: Regrid Property Example 2Based on these land use and zoning codes, can I build a house on either of these parcels?

I was just looking into this, and it seems that Oakland will only allow ADUs on properties with a single family residence (not multi-unit properties). 

Investment Info:Single-family residence fix & flip investment.

Investment Info:Single-family residence buy & hold investment.

My plan was to keep the condo as my residence, but after a year, refinance to fund a down payment on a multi-family property, either out of state or in the surrounding NY area.

@Heather Bailey When house hacking with a separate rental unit, ensure proper insurance by obtaining landlord or short-term rental coverage tailored for Airbnb activities, in addition to your primary residence policy.

In most cases, I don't recommend renting out your primary residence especially if you have no rental experience and that is because usually your primary residence was bought without the idea of renting it out.