Unlocking the Benefits of House Hacking with FHA Financing
House hacking with FHA financing is becoming an increasingly popular way for real estate investors to get started in the industry. For those unfamiliar, house hacking is a strategy that involves purchasing a property and using it as both your primary residence and income-producing asset. It’s called “house hacking” because you are essentially “hacking” the housing market by buying one property and renting out part of it while living in the rest of it.
The Federal Housing Administration (FHA) offers loan programs specifically designed for house hackers that make getting into real estate investing easier than ever before.
- The most attractive part about taking advantage of FHA financing is its low down payment requirements—just 3.5% required for most home purchases. This makes it significantly easier to purchase a property than if you had to put down 20% or more, which is often the case with traditional mortgages. Additionally, FHA loans are eligible for mortgage insurance premiums (MIP) and guarantee fees, both of which can help reduce the amount of money you have to pay out-of-pocket when buying a house.
- There are some restrictions that come along with using FHA financing for house hacking; you must live in the property as your primary residence for at least 12 months, and no more than four unrelated people can occupy the unit at any given time.
- Despite these restrictions, house hacking with FHA financing is still a great way to get started in the real estate industry. It’s low down payment requirements, mortgage insurance premiums and guarantee fees make it easier to purchase a property than traditional mortgages and can help you save money in the long run. Plus, the additional income from renting out part of your home can be used to offset costs associated with the loan or for other investments.
If you’re interested in getting into real estate investing, house hacking with FHA financing is definitely worth considering. With its low down payment requirements and other benefits, it’s an easy way to get started and can be incredibly rewarding if done correctly. Start exploring your options today!
I'm Jay Thomas, a REALTOR in Houston, Texas. Chances are you and I share a similar passion, Real Estate! I also have a passion for building businesses, working out, inspiring others, technology, sports, and people. Connect with me on Facebook and Instagram!