House Hacking with an FHA Loan in Nevada

Yes! This is one of the most powerful features of FHA loans. As long as you intend to live in one of the units as your primary residence, FHA allows 2-4 unit properties to qualify for the same 3.5% down payment as a single-family home.

For example, on a $600,000 fourplex, you'd need $21,000 down (3.5%) plus closing costs (~$12,000-18,000), so around $33,000-39,000 total to close. That's far less than most people think is needed to become a real estate investor!

The key requirement: you must occupy one unit as your primary residence for at least 12 months after closing. After that year, you're free to move out and rent your unit, keeping the property as a rental investment.

House hacking is actually one of the lowest-risk ways to start as a landlord because:

• You live on-site: You can handle small issues immediately and keep an eye on the property. If a tenant has a problem, you're right there – no property manager needed initially.
• Smaller scale: Managing 1-3 tenants is far easier than managing 10+ units in a large complex. You learn as you go without being overwhelmed.
• Lower financial risk: If one unit is vacant, you still have rental income from the other unit(s) to offset costs. And you're living there, so your own "rent" is covered by ownership.

Nevada Landlord Resources: Nevada law requires you to follow residential landlord-tenant laws (NRS 118A). It's straightforward: provide habitable units, handle repairs promptly, follow proper eviction procedures if needed, etc. There are plenty of resources and templates for leases online, or you can hire a local property attorney to draft your first lease (~$300-500 one-time).

Many house hackers find being a landlord is easier than expected, especially with quality tenants. Proper screening (credit check, income verification, references) goes a long way. And if you ever want to offload the work, you can hire a property manager (typically 8-10% of monthly rent) to handle tenant relations, repairs, and rent collection.

Great question. If the property has existing tenants with leases, the lender will use those actual lease amounts (and you'll provide the lease agreements as documentation). Easy.

If units are vacant (or you're buying a property that needs work before renting), the FHA appraiser will determine fair market rent during the appraisal process. The appraiser researches comparable rental properties in the area and provides a rental income estimate for each unit in the appraisal report.

The lender then uses 75% of that appraised market rent as your qualifying income (the 25% discount accounts for vacancy and maintenance). This is the number that offsets your housing payment in the DTI calculation.

Example: Appraiser says each of 3 units can rent for $1,500/month = $4,500 total. Lender uses 75% × $4,500 = $3,375/month as rental income credit toward your qualification. So if your mortgage is $4,000/month, your DTI calculation only counts $625 as housing expense ($4,000 - $3,375). This makes qualifying much easier!

You can absolutely repeat the strategy! In fact, this is how many Nevada investors build substantial rental portfolios quickly with minimal cash outlay.

Here's the typical cycle:

1. Year 1: Buy first multi-unit with FHA (3.5% down), live in one unit, rent others. Build equity for 12 months.
2. After 12 months: Move out (FHA 12-month occupancy met). Rent your former unit. Property is now 100% rented, generating cash flow.
3. Repeat: Use another FHA loan to buy a second multi-unit, move into that one, repeat the cycle. (You can only have one FHA loan at a time for a primary residence, but once you move out of the first property, it's considered investment/rental, freeing you to get another FHA loan for your new primary.)
4. Alternative (if you have equity): After a few years, refinance or get a conventional loan for the next property (conventional allows 15-20% down for investment property if you have it). Or do a cash-out refi on property #1 to pull equity for property #2 down payment.

Many house hackers do this 2-3 times in their 20s and 30s, ending up with multiple rental properties and significant passive income by their 40s. Each property builds equity and cash flow over time.

Pro tip: After your second or third multi-unit, you might have enough rental income and equity to qualify for conventional investment loans (which don't require you to live in the property), allowing you to scale even faster without moving every year.

Multi-unit properties (especially duplexes and triplexes) are less common than single-family homes, so yes, you'll have fewer options to choose from. But they absolutely exist in Nevada, particularly in:

• Las Vegas: Downtown area, older neighborhoods near UNLV, North Las Vegas. Duplexes and triplexes are scattered throughout the valley.
• Henderson: Some multi-units, though less common (Henderson skews more single-family). Look in older parts of Henderson.
• Reno/Sparks: Good supply of duplexes and small multi-units, especially near UNR (University of Nevada, Reno) – student rentals are popular.

Price-wise: Multi-units cost more upfront than a single-family home (e.g., a triplex might be $500K-600K vs a single-family at $400K), but remember: you're buying 3 homes in one. On a per-unit basis, they're often a better deal. Plus, the rental income more than makes up for the higher mortgage.

Finding them: Work with a real estate agent experienced in investment properties. Search MLS for "multi-family" or "2-4 units." Also check Zillow, Realtor.com with filters for multi-family. Some are listed as "investment property" even though FHA owner-occupants can buy them. Be patient – it might take a few months to find the right one, but the payoff is worth it.

Also consider properties that need light cosmetic work (paint, flooring, etc.) – these often have less competition from investors and you can add value with sweat equity, then raise rents or refinance later.