House Hacking Calculator

What Is House Hacking?

House hacking is buying a 2-4 unit property (duplex, triplex, or fourplex), living in one unit as your primary residence, and renting the remaining units to tenants. The rental income offsets your mortgage, often making your net housing cost zero or negative. Because it is owner-occupied, you qualify for low-down-payment financing — FHA at 3.5% down, conventional at 5%, or VA at 0% — instead of the 20-25% down typically required for investor loans.

How the Math Works

Your total monthly PITI (principal, interest, taxes, insurance, plus HOA) is the fixed cost. Rental income from the other units reduces that cost. After subtracting vacancy, repairs, and any utilities you cover, the result is your effective housing cost. In strong markets a duplex house hack often produces $500-$1,500/month in savings versus renting a comparable apartment — plus you build equity and get mortgage interest and depreciation tax deductions.

FHA vs Conventional Down Payment on a Multi-Family

FHA allows 3.5% down on 1-4 unit owner-occupied property, but charges upfront MIP (1.75%) and monthly MIP for the life of the loan (on new FHA with less than 10% down). Conventional loans now require 5% down on a 2-unit, 15% on 3-4 units. Rates, mortgage insurance cost, and loan limits should all be compared. For most first-time house hackers, FHA wins on down payment while conventional often wins on monthly cost after MIP.

Planning the Exit

Most house hackers plan to move out after 12-24 months, convert the owner-occupied unit to a rental, and repeat. Because the 1-year occupancy requirement is satisfied, the whole property becomes a rental at investor-loan terms you bought at owner-occupied terms — a permanent advantage. Running the after-move-out cash flow in a rental cash-flow calculator confirms whether the property stands on its own as a pure investment.