What Is Fourplex?
A fourplex is a 4-unit residential building. It's the largest property type that qualifies for FHA financing (3.5% down) when you house-hack—live in one unit, rent the other three. Four units mean four income streams and better vacancy-rate cushion than a duplex or triplex. Once you move out, it's typically financed as a commercial or investment property with higher down-payment requirements.
A fourplex is a residential building containing four separate dwelling units—the maximum number of units that qualify for FHA owner-occupied financing when you live in one unit.
At a Glance
- What it is: Building with four separate residential units
- Why it matters: Max units for FHA; four income streams under one roof
- Financing: FHA 3.5% down if owner-occupied; otherwise 15–25% typical
- Layout: Often two-over-two or single-story row
- Best for: House hackers wanting maximum units on residential financing
How It Works
The FHA ceiling. FHA caps owner-occupied multi-family at 4 units. A fourplex is the largest property you can buy with 3.5% down while living in one unit. On a $420,000 fourplex in Kansas City, that's $14,700 down—vs. $84,000–$105,000 for non-owner-occupied financing.
Income math. Four units at $1,000 each = $4,000/month gross. Operating-expenses at 45% leave $2,200 in noi. With piti of $2,400, the three rented units might cover most of the payment. You're living cheap while building equity.
When you move out. FHA requires owner-occupancy. If you leave within a year, you may face penalties. After that, you refinance to conventional or commercial. The property becomes a pure investment—no more mortgage-offset from your own "rent."
Management scale. Four units is still manageable for a self-managing landlord. It's a stepping stone before multi-family-property at 5+ units, which often requires professional management.
Real-World Example
Maya in St. Louis. Maya bought a fourplex for $298,000 with FHA, 3.5% down ($10,430). She lived in one unit and rented the other three for $850, $900, and $950. Gross rent: $2,700. Her piti was $1,980. After operating-expenses and vacancy-rate reserve, the three rented units covered the mortgage with $320 to spare. She lived rent-free for two years, then refinanced to conventional and moved to a single-family. The fourplex now cash flows $380/month.
Pros & Cons
- Maximum units for FHA owner-occupied financing
- Four income streams; one vacancy = 75% of rent remains
- Strong mortgage-offset potential
- Good scale before moving to 5+ units
- Fewer fourplexes than duplexes on market
- Four tenants to manage
- Moving out triggers refinance (may raise payment)
Watch Out
- Owner-occupancy: FHA requires intent to live there; don't buy and immediately rent all four
- Refinance timing: Rates may be higher when you move out; model the refi scenario
Ask an Investor
The Takeaway
A fourplex is the highest-leverage house-hacking play: 3.5% down, four units, and strong income potential. It's the ceiling for residential-style financing before crossing into commercial territory.