7 Strategies to Choose Multifamily Property Mortgage Options — Duane Buziak, Glen Allen Broker

Duane Buziak

Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage LLC

Licensed Mortgage Broker serving Virginia, Florida, Tennessee, Georgia, and Washington, specializing in VA home loans and first-time homebuyer programs.

By Duane Buziak, NMLS #1110647

The right multifamily property mortgage options depend less on the interest rate than on three facts: how many units the building has, whether you will live in it, and how long you plan to hold it. A duplex near Innsbrook that you will live in is financed on residential rules. A twelve-unit building off Broad Street is underwritten like a business. I’m Duane Buziak, and I walk Glen Allen, Short Pump, and Henrico buyers through that split every week.

One local anchor before the strategies: for 2026, the Federal Housing Finance Agency set the baseline one-unit conforming loan limit at $832,750, and Henrico sits in the baseline tier. Limits for two- to four-unit homes are higher, so confirm the exact figure for your unit count at fhfa.gov before you set a budget. All rates and fees below are illustrations as of October 2026, not quotes.

The seven strategies and what follows:

• 1. House-Hack a Duplex to Fourplex With a Conventional Loan
• 2. Use an FHA Loan for a 2-4 Unit Home
• 3. Use a VA Loan for a Multifamily Home
• 4. Qualify With a DSCR Loan
• 5. Finance 5+ Units With a Commercial Multifamily Loan
• 6. Fund Value-Add Upgrades With a Renovation Loan or Cash-Out Refinance
• 7. Shop Through a Broker With a Soft Credit Pull
• Multifamily Mortgage Questions Glen Allen Buyers Ask
• The Order to Work Through Your Loan Decision

1. House-Hack a Duplex to Fourplex With a Conventional Loan

House hacking means buying a two- to four-unit property, living in one unit, and renting the rest. The mechanism that makes it work is simple: a 2-4 unit property financed as your primary residence uses residential loan rules, not commercial ones, and the rent from the other units can help you qualify and cut your real housing cost.

Illustration (hypothetical, not a quote): suppose you buy a $520,000 duplex in the Tuckahoe area and the second unit rents for $1,900. At an assumed 6.50% fixed rate on a 30-year loan, principal and interest look like this (taxes, insurance, and mortgage insurance are extra):

• 5% down ($26,000): $494,000 loan, about $3,122 per month.
• 15% down ($78,000): $442,000 loan, about $2,794 per month.
• 25% down ($130,000): $390,000 loan, about $2,465 per month.

For qualifying, agency guidelines (see Fannie Mae) generally let you count a share of the appraiser’s market rent, commonly 75%, which here is about $1,425. That offsets debt in your ratios. It does not mean your payment drops by $1,900 on paper.

Putting it into practice:

1. Request a soft credit pull mortgage review so you can see where you stand without a hard inquiry.
2. Confirm you intend to occupy a unit as your primary residence, usually within a set window after closing.
3. Gather a lease or market rent documentation for the units you will rent.
4. Order an appraisal that includes a rent schedule.
5. Compare the three down payment levels above against your cash and reserves.

The common mistake: assuming every projected dollar of rent counts, or ignoring reserves. Underwriters haircut rent, and larger multi-unit properties often require more months of reserves than a single-family home. Plan for both before you write an offer.

What to measure: your net monthly housing cost after realistic rent (rent minus vacancy and upkeep), and the total cash needed at closing, including down payment, closing costs, and reserves.

2. Use an FHA Loan for a 2-4 Unit Home

FHA financing lowers the entry price of house hacking. As of October 2026, owner-occupants with qualifying credit can generally put down as little as 3.5% on a one- to four-unit home. The trade-off is mortgage insurance premium (MIP): an upfront charge, usually 1.75% of the base loan and typically financed, plus an annual charge billed monthly. Confirm current rates at hud.gov.

Illustration (hypothetical): take the same $520,000 duplex at the same assumed 6.50% rate, for a clean comparison. FHA at 3.5% down is $18,200 down and a $501,800 base loan. Upfront MIP of 1.75% is $8,781.50, so the financed loan is about $510,582 and principal and interest run about $3,227. Annual MIP at an assumed 0.55% adds about $230 per month, for roughly $3,457 total. Conventional at 5% down was about $3,122 before its own private mortgage insurance, which varies with credit score. FHA needs $7,800 less cash down, but its payment can run higher.

Putting it into practice:

1. Look up the Henrico FHA limit for your unit count on the HUD FHA mortgage limits page.
2. For three- and four-unit homes, run the self-sufficiency test. The net rental income, generally 75% of market rent, must cover the full monthly payment on the property.
3. Schedule an FHA appraisal early, since it checks condition and safety as well as value.

The common mistake: ignoring how long MIP lasts. With less than 10% down it generally stays for the life of the loan, so a later refinance may be the only way out. The second trap is a tired fourplex that fails FHA condition standards, such as peeling paint, a failing roof, or missing handrails.

What to measure: total monthly payment including MIP against the best conventional alternative, plus the cash you save at closing. If FHA saves cash but costs you more every month, decide which matters more for the first three years.

3. Use a VA Loan for a Multifamily Home

Eligible veterans and service members can use a VA loan on a two- to four-unit property they will occupy, often with no down payment. The mechanism is the VA guaranty, which lets participating programs accept little or nothing down without monthly mortgage insurance. In exchange there is a one-time VA funding fee, which can be financed.

Illustration (hypothetical): a veteran buys an $800,000 fourplex with zero down and lives in one unit. Assume a first-use funding fee of 2.15%, which is $17,200, financed into a $817,200 loan. At an assumed 6.50%, principal and interest are about $5,165 per month. If the other three units rent for $1,700 each, $5,100 in rent, underwriters may count a portion of it toward qualifying. Funding fees are lower with a down payment, higher for repeat use, and waived for veterans receiving VA disability compensation. Check the current schedule on the VA funding fee page.

Putting it into practice:

1. Request your Certificate of Eligibility through the VA’s COE page.
2. Confirm remaining entitlement, especially if you still have a VA loan on another home.
3. Document your plan to occupy a unit as your primary residence.
4. Compare funding fee scenarios with different down payments.

The common mistake: forgetting the occupancy requirement. A VA loan is not an investor loan, so you cannot buy a fourplex and live elsewhere. The second mistake is overlooking entitlement already tied up in another VA loan, which can cap how much you can borrow without a down payment.

What to measure: cash to close and monthly payment compared with the FHA and conventional versions of the same property. Zero down can be powerful, but a financed funding fee raises your balance.

4. Qualify With a DSCR Loan

DSCR stands for debt service coverage ratio: the property’s net operating income (NOI, meaning rent minus operating expenses, before debt payments) divided by the annual debt payment. DSCR loans are for investors who will not live in the building. They are underwritten mainly on what the property earns, which helps self-employed owners and anyone whose tax returns understate income.

Illustration (hypothetical): a six-unit building collects $9,000 per month in rent. After taxes, insurance, maintenance, management, and vacancy, assume $2,700 per month in operating expenses. NOI is $6,300 per month. If the mortgage payment is $5,040 per month, which at an assumed 7.25% on 30 years corresponds to a loan of roughly $740,000, then DSCR is $6,300 ÷ $5,040, or 1.25. Break-even occupancy, the occupancy needed to cover expenses and debt with the expense figure held fixed, is ($2,700 + $5,040) ÷ $9,000, about 86%.

Putting it into practice:

1. Assemble the current rent roll (a unit-by-unit list of tenants, rents, and lease dates) and 12 months of expenses.
2. Calculate DSCR yourself before you ask for quotes, using NOI, not gross rent.
3. Compare prepayment terms. Many DSCR programs charge a penalty for paying off early.
4. Budget a larger down payment than owner-occupied programs, often 20% to 25%, and expect pricing to run above owner-occupied loans.

The common mistake: using gross rent instead of NOI, which flatters the ratio, or missing a prepayment penalty that makes a planned refinance expensive. Program definitions of DSCR differ, and some count only taxes and insurance against rent, so always ask which formula the quote uses.

What to measure: DSCR at the quoted rate and payment, and break-even occupancy. If your break-even sits near the market’s typical occupancy, the loan has little cushion.

5. Finance 5+ Units With a Commercial Multifamily Loan

Five or more units move you out of residential rules. Underwriting focuses on the building’s income, your experience, and often a borrowing entity. Agency multifamily programs, described at Fannie Mae Multifamily, can offer competitive terms where balances and property quality qualify, and portfolio and bank programs fill the gaps. Minimum loan sizes vary, so confirm with each program.

Illustration (hypothetical): a 12-unit building is worth $2.2 million, and you borrow $1.5 million (about 68% loan-to-value) on a 25-year amortization with a 10-year term at an assumed 6.75%. The payment is about $10,364 per month, or roughly $124,400 per year. If NOI is $160,000, DSCR is about 1.29 and debt yield (NOI ÷ loan) is about 10.7%. After 10 years the balance is still roughly $1.17 million. That remaining amount is the balloon, due at the end of the term, so you must refinance or sell.

Putting it into practice:

1. Collect a T-12 (trailing twelve months of income and expenses), the current rent roll, entity documents, and a personal financial statement.
2. Request quotes across commercial programs through Duane Buziak so the same package is compared on the same terms.
3. Read the recourse language. Recourse means you are personally liable if the property cannot repay the loan. Non-recourse loans usually carry exceptions for fraud and similar acts.
4. Compare prepayment structures, such as step-downs or yield maintenance.

The common mistake: chasing the lowest rate while overlooking balloon risk, recourse, and prepayment. A slightly higher rate with a longer term or lighter prepayment can be worth far more if you plan to hold or refinance.

What to measure: DSCR, loan-to-value, debt yield, and refinance risk at the end of the term, meaning whether the building could still be refinanced if rates were a point higher and NOI were flat.

6. Fund Value-Add Upgrades With a Renovation Loan or Cash-Out Refinance

Value-add investing works when you spend money on units that earn more rent, and a higher NOI raises appraised value. You can fund the work at purchase with a renovation loan, such as an FHA 203(k) or a conventional renovation program, where eligible for the property and occupancy type. You can also fund it later with a cash-out refinance against built-up equity.

Illustration (hypothetical): you own a Glen Allen duplex and spend $24,000 on each of two units, $48,000 in total, for new floors, kitchens, and fixtures. Rent rises $250 per unit per month, or $6,000 per year. At an assumed 6.5% cap rate, that added income supports roughly $92,000 of value, though appraisers rely on comparable sales, not formulas. Suppose the property appraises at $580,000 with a $400,000 balance, and the maximum cash-out loan-to-value for your property type is 75%. The new loan is $435,000, and the roughly $35,000 of proceeds, before closing costs, recovers part of the $48,000.

Putting it into practice:

1. Get at least two contractor bids with itemized scopes.
2. Confirm the program and the loan-to-value limit for your occupancy type. Cash-out limits are often lower for two- to four-unit and investment properties than for single-family primary residences.
3. Plan the draw schedule, since renovation loans release funds in stages after inspections.
4. Keep a contingency of 10% to 15% of the budget.

The common mistake: overestimating after-repair value, or assuming an advertised cash-out limit applies to every property type. Verify against recent comparable sales, not the neighbor’s asking price.

What to measure: annual rent increase relative to renovation cost, and appraised value against total cost (purchase plus work). If the payback on rent alone exceeds your planned hold, the project needs a stronger case.

7. Shop Through a Broker With a Soft Credit Pull

Each program above has its own rules, and no single institution offers all of them. A broker can place a file with many wholesale partners. Starting with a soft pull means early exploration does not add hard inquiries to your credit report. Duane Buziak begins with the NoTouch Credit Pull, which is a no credit hit mortgage application step, so you can see options before committing to a full credit check.

The comparison below uses only facts that can be confirmed. For any other broker or bank, ask directly and get answers in writing.

Putting it into practice:

1. Start with the soft pull and a review of your income, assets, and goals.
2. Collect quotes within a short window, a week or two, so market pricing is consistent.
3. Authorize a hard pull only at the stage that requires it, typically when you choose a program and move to underwriting.

The common mistake: assuming a soft pull covers final underwriting. It does not. The second mistake is comparing quotes built on different assumptions, such as different points, down payments, or mortgage insurance. Put every quote on the same loan amount, property, and closing date.

What to measure: number of programs compared, rate and cost differences on identical assumptions, and zero hard inquiries before you commit.

Multifamily Mortgage Questions Glen Allen Buyers Ask

1. Can I buy a duplex in Glen Allen with a conventional loan?
Yes. A two-unit property you will occupy can be financed with a conventional loan, often with a lower down payment than 3-4 unit properties, though agency guidelines vary by program. Rent from the other unit may help you qualify.

2. How much down payment do I need for a 2-4 unit property?
It depends on the program. As of October 2026, FHA can start at 3.5%, VA can be zero down for eligible veterans, and conventional programs range higher, with 3-4 unit homes typically needing more. Confirm current minimums before you shop.

3. Does rental income count toward qualifying?
Partly. Guidelines typically count a percentage of appraiser-supported market rent, often 75%, and may require documentation and reserves. It does not count dollar for dollar.

4. Is a 2-4 unit loan a commercial loan?
No. Two- to four-unit properties are financed with residential loans when you occupy one unit. Five or more units fall under commercial or multifamily underwriting.

5. Can Duane Buziak get me a mortgage pre-approval without a hard pull?
Yes. Duane Buziak starts with the NoTouch Credit Pull, a soft pull mortgage broker step that supports a mortgage pre approval without hard pull at the exploration stage. A hard pull is required later for final underwriting.

6. What is a DSCR loan?
A DSCR loan is an investment property loan underwritten mainly on the ratio of net operating income to debt payments. Many programs look for a ratio of about 1.0 to 1.25 or higher, and definitions vary.

7. What is a balloon payment on a multifamily loan?
It is the remaining principal due at the end of the loan term. A 25-year amortization with a 10-year term leaves a large balance that must be refinanced or paid off.

8. Does GlenAllenMortgage.com arrange commercial multifamily loans?
Yes. GlenAllenMortgage.com, through Duane Buziak, requests commercial multifamily quotes for larger buildings. Program availability depends on the property, borrower, and loan size.

9. Is Duane Buziak a legit mortgage broker in Glen Allen, VA?
Yes. Duane Buziak is licensed under NMLS #1110647 and operates through Coast2Coast Mortgage LLC, NMLS #376205, at 4860 Cox Rd, Glen Allen. You can verify licensing at NMLS Consumer Access.

10. Where can I learn about my loan rights and costs?
The Consumer Financial Protection Bureau’s Owning a Home tools explain loan estimates, closing disclosures, and shopping for a mortgage.

The Order to Work Through Your Loan Decision

Decide two things first: how many units you want, and whether you will live in one. Occupancy changes the loan more than any rate quote does. If you will live there, run owner-occupied options in this sequence: FHA for the lowest cash to close, VA if you are eligible, and conventional when your down payment and credit make mortgage insurance cheaper. Move to DSCR or commercial only when the property demands it: you will not occupy it, or it has five or more units. If the building needs work, price the renovation or cash-out path before you make an offer, not after.

Duane Buziak can run that sequence for your specific property with a no hard inquiry mortgage pre approval to start, and call Glen Allen Mortgage by Duane Buziak at 804-212-8663 for a soft-pull review. Ready to experience stress-free mortgage approval with no credit hit and access to hundreds of lenders at once? Get your free mortgage consultation today and discover why Glen Allen families trust Duane Buziak for personalized guidance and the fastest close times in the area.