FHA, VA or conventional for a 2-4 unit you'll live in

All three loans work on a 2-4 unit building you live in. FHA gets you in with 3.5% down and forgiving credit, but charges mortgage insurance, for the life of the loan if you put down less than 10%, and adds a rent test on three and four units. VA can mean nothing down if you’re eligible. Conventional needs a higher credit score (Freddie Mac’s floor is 620), but has no upfront premium and no self-sufficiency test.

The choice usually comes down to two things: how much cash you have, and whether the building is a triplex or fourplex that FHA’s rent test would fail.

Side by side

	FHA	VA	Conventional
Who qualifies	Anyone who’ll live there	Borrowers VA finds eligible (veterans and service members, mainly)	Anyone who’ll live there
Least down	3.5% with a 580+ score; 10% at 500-579	Often none, per VA	Freddie Mac: 5% if its automated underwriting (LPA) approves
County limit	FHA limit for 2, 3 or 4 units	None with full entitlement	Conforming limit for 2, 3 or 4 units
Mortgage insurance	1.75% upfront plus 0.50-0.75% a year on a 30-year loan	None (funding fee instead)	Private MI if under 20% down
Rent that counts	75% of the lower of market rent and lease	75% of the lease, with conditions	Fannie Mae: 75% of gross rent
Reserves after closing	3 months PITI on 3-4 units	6 months PITI if rent is counted	Fannie Mae automated: 6 months
Extra hurdle	Self-sufficiency test, 3-4 units	Residual income	None of those

FHA

You need a credit score of 580 or higher for the 3.5% minimum, and 500 to 579 limits you to 90% loan-to-value. The handbook applies the same numbers to two, three and four units. At least one borrower has to move in within 60 days of closing and intend to stay a year, and FHA generally won’t insure a second principal residence for you while you have one.

The costs are the premiums. There’s a 1.75% upfront premium on every purchase loan, which can be added to the balance, and an annual premium that depends on the loan size and down payment. On a 30-year loan with a base loan up to $726,200, the annual premium is 0.55% with under 5% down and 0.50% with 5% or more; above $726,200 it’s 0.75% and 0.70%. With less than 10% down it lasts the life of the loan; with 10% or more it ends after 11 years.

On a triplex or fourplex, the rents also have to pass the self-sufficiency test. Run it before you make an offer.

One more catch: a parent or other non-occupying co-borrower can’t help as much on a 2-4 unit. HUD caps those loans at 75% loan-to-value.

VA

VA’s regulations cover a dwelling of up to four family units, and you must certify that you intend to live there. VA’s own page says its guaranty lets most buyers buy with no down payment, and a veteran with full entitlement has no county loan limit.

If some of your entitlement is still tied up in another VA loan, the county limit comes back, with a twist: VA uses the one-unit conforming limit even for a fourplex. Your guaranty is 25% of that limit minus the entitlement in use, and VA says most lenders want entitlement and any down payment together to cover 25% of the loan.

To count rent from the other units, the regulation asks for “a reasonable likelihood of success as a landlord,” judged from prior experience managing rentals, and reserves to carry the full payment for at least six months without the rent. Then it counts 75% of the lease amount. A first-time landlord with no reserves may be approved only on their own income.

There’s no monthly mortgage insurance on a VA loan, but there is a funding fee. We haven’t included its rates here; check VA’s current funding fee table.

Conventional

Freddie Mac’s published maximum is 95% loan-to-value on a two-, three- or four-unit primary residence when its Loan Product Advisor returns an Accept. That drops to 85% (two units) or 80% (three or four) for a super conforming loan above the national baseline, and the same for a manually underwritten loan. Freddie’s 2-4 unit product page lists a minimum credit score of 620 unless its guide says otherwise.

Fannie Mae publishes its maximum in its Eligibility Matrix; ask your lender for the current figure.

Fannie Mae counts 75% of gross rent from the units you rent out, never from the unit you live in. If you have less than 12 months of experience managing rentals, positive rental income can offset the property’s payment only, not add to your income. Its automated underwriting wants six months of reserves on a 2-4 unit principal residence.

With under 20% down you’ll pay private mortgage insurance, priced by the lender. There’s no upfront premium and no self-sufficiency test.

The same duplex three ways

A $500,000 duplex, $6,000 a year in taxes, $2,000 in insurance, an example rate of 6.5% for 30 years on all three (use your own quotes; rates differ by program):

	FHA, 3.5% down	VA, 0% down	Conventional, 5% down
Cash down	$17,500	$0	$25,000
Loan	$490,943 (with upfront MIP)	$500,000	$475,000
Principal and interest	$3,103.09	$3,160.34	$3,002.32
Taxes and insurance	$666.67	$666.67	$666.67
Monthly mortgage insurance	$225.02	none	not included
Monthly (FHA includes MIP; PMI and VA funding fee not included)	$3,994.78	$3,827.01	$3,668.99

The conventional line leaves out private mortgage insurance and the VA line leaves out the funding fee, because both depend on quotes and tables we haven’t sourced here. Add them before you compare. The calculator runs any of the three against your county’s limit.

Sources

• HUD Handbook 4000.1, Update 18, issued August 12, 2026, and the MIP chart in its Appendix 1.0 (Mortgagee Letter 2023-05).
• 38 CFR 36.4301 and 38 CFR 36.4340, eCFR current as of October 22, 2026; 38 U.S.C. 3703 and 3704; VA loan limits page, updated August 12, 2025.
• Fannie Mae Selling Guide B3-3.8-01 and B3-3.8-02 (September 2, 2026), B3-4.1-01 (August 7, 2024).
• Freddie Mac maximum LTV requirements and 2-4 unit mortgages, retrieved October 24, 2026.