House hacking

House hacking in Chicago and Illinois

House hacking means buying a 2 to 4 unit building, living in one unit, and renting the others so your tenants help pay your mortgage. I've done it myself with a 2-flat, and I help first-time buyers and new investors do the same.

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  • Daniel EllingtonLicensed Illinois Real Estate Broker
  • Infiniti PropertiesBrokerage since 1991, Homewood office
  • IL License #475211812Chicagoland and throughout Illinois

Who this is for

First-time buyers

Buy your first home and your first rental in the same purchase.

Renters

Replace your rent payment with an investment that builds equity.

New investors

Start with low-down-payment owner-occupant financing.

How it works

  1. Get pre-approved FHA or conventional owner-occupant financing, with rental income considered.
  2. Find the building 2-flats, 3-flats, and 4-units in towns with strong rental demand.
  3. Check the numbers Rents, expenses, and the FHA self-sufficiency test for 3-4 units.
  4. Move in and rent Live in one unit and rent the others.

What I do for you

  • FHA self-sufficiency test run before you offer on 3-4 unit buildings
  • Rent estimates for each unit
  • Inspection focus on systems that matter in older multi-units
  • Lenders who understand FHA multifamily and 203(k) loans
  • Advice from someone who house hacked a 2-flat

FHA and conventional options

FHA loans allow 1 to 4 unit properties with 3.5% down for buyers with a 580+ credit score, as long as you live in one unit, generally for at least a year. Conventional loans allow 2 to 4 unit owner-occupied purchases with as little as 5% down.

For 3 and 4 unit buildings, FHA requires the property to pass a self-sufficiency test: 75% of the expected rent from all units must cover the full monthly mortgage payment.

Common questions

What is house hacking?

Buying a multi-unit property, living in one unit, and renting out the others. The rent offsets your housing cost and you build equity in an income-producing property.

How much do I need to put down?

As little as 3.5% with FHA (580+ credit score) or 5% with a conventional loan on 2 to 4 units. Plan separately for closing costs and reserves.

Can rental income help me qualify?

Yes. Lenders can count a portion of the expected rent from the other units, which can help you qualify for a larger loan.

What is the FHA self-sufficiency test?

For 3 and 4 unit FHA purchases, 75% of the expected rent from all units must be enough to cover the full mortgage payment, including taxes and insurance. Many buildings fail it, so I test before you offer.

Can I use a 203(k) loan to house hack a fixer-upper?

Yes. An FHA 203(k) loan combines the purchase and renovation costs into one mortgage for owner-occupants, which works well for multi-units that need work.

This page is general information, not legal, tax, or lending advice. Consult a real estate attorney, CPA, or lender about your situation.

Other investor strategies

Wholesaling

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Novations

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Fix and flip

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BRRRR

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Multifamily rentals

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Creative financing

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Out-of-state investors

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All investor services

Investor overview

Ready to house hack your first building?

Call or text Daniel directly, or send a message. Most inquiries get a same-day response.

708-625-8788
Infiniti Properties, 2401 183rd St, Homewood, IL 60430
Brokerage 708-206-3000  |  IL License #475211812

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What Our Clients Say About Us

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Daniel Ellington: Chicago’s Best Real Estate Broker
4.8 (19)
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Adam Bevan
Adam Bevan
11 months ago

Dan was an excellent representative for us and I wouldn't hesitate to work with him again

Lorenzo Douglas
Lorenzo Douglas
8 months ago

Daniel has been amazing for me as an out of state investors. Very response, pretty decent comps. He's gone above and beyond for me.

Jared Rowntree
Jared Rowntree
7 months ago

Daniel was absolutely phenomenal during our house hunt and closing. Any time an issue came up, Daniel took it in stride and helped everybody involved to have a smooth process. He is wildly friendly and knowledgeable, and was invaluable to us as First Time Homebuyers; he kept us informed and up to date the second anything changed. I wouldn’t hesitate to hire Daniel again for my next house, and the next ones after that.

Michael Van Kley
Michael Van Kley
4 months ago

Daniel was great. I would use him again.

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