Fourplex Financing in Florida: The Last Residential Loan Before Commercial

Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.

Fourplex financing Florida investors use covers the largest property that still qualifies for a residential mortgage rather than a commercial loan.

Live in one unit and the down payment drops sharply. Buy it purely as a rental and the rules tighten. Our investment property page covers the rental side.

Why four units is the line

Residential mortgage programmes cover one to four units.

Five units and up is commercial, with different underwriting and pricing.

See our guide to the financed property limit in Florida.

A fourplex gets residential rates and terms.

That is its main appeal.

Owner-occupied fourplex

FHA finances a fourplex you live in with 3.5% down.

Conventional reaches 5% down on multi-unit owner-occupied property.

See our guide to 5% down conventional on multifamily in Florida.

VA finances it with nothing down for eligible veterans.

You must occupy one unit as your primary residence.

Investor-owned fourplex

Expect 25% down on a conventional investment loan.

Reserves of six months or more.

See our DSCR page for the rent-based alternative.

Pricing carries the investment property adjustment.

The rules are stricter across the board.

Rental income from the other units

The appraiser prepares a rent schedule for each unit.

Lenders count a percentage of the rent toward your qualifying income.

See our guide to using rental income to qualify in Florida.

Three units of rent can carry most of the payment.

Existing leases strengthen the file.

The FHA self-sufficiency test

On a three or four-unit FHA purchase, the rents must cover the full payment under a set formula.

The test uses a discounted rent figure.

See our FHA loan page.

High-priced South Florida fourplexes sometimes fail it.

Run the test before you offer.

Loan limits for four units

Conforming and FHA limits rise with unit count.

A fourplex limit is far above the single-family figure.

See our guide to conforming loan limits in Florida.

Most Florida fourplexes fit inside it.

Above the limit, jumbo rules apply.

The appraisal

The appraiser uses fourplex sales and an income approach.

Comparables can be thin outside older urban neighbourhoods.

See our guide to a low appraisal in Florida.

Condition of every unit matters.

Allow extra time.

Where Florida fourplexes sit

Older neighbourhoods in Miami, Fort Lauderdale, Tampa, Orlando and Jacksonville.

Many were built in the 1950s through the 1970s.

See our guide to the four-point inspection in Florida for what that age means.

New fourplex construction is rare.

Condition drives everything.

Insurance on a fourplex

A landlord policy covers the building; tenants carry their own contents cover.

Older roofs and systems price high.

See our guide to Florida homeowners insurance cost.

Flood cover follows the zone.

Quote before you offer.

Separate meters and utilities

Separately metered units let tenants pay their own electricity.

Master-metered buildings leave the owner paying and recovering through rent.

Appraisers and lenders note the set-up.

Converting to separate meters is a real cost.

Ask before you offer.

Zoning and legal units

All four units must be legal under current zoning.

An illegal fifth unit or an unpermitted conversion is a problem.

See our guide to unpermitted work and mortgages in Florida.

The county's records show the permitted unit count.

Verify it.

House-hacking the fourplex

Live in one unit, rent three, and the building often carries itself.

See our guide to 5% down conventional on multifamily in Florida.

After the occupancy period you can move and keep it as a rental.

Then repeat with the next building.

This is the classic path into Florida multifamily.

Management and tenants

Four units means four leases, four sets of repairs and four turnovers.

Self-management works if you live on site.

Professional management costs a percentage of rent.

Florida landlord-tenant law sets notice and deposit rules.

The Florida Statutes chapter 83 governs residential tenancies.

Refinancing a fourplex

Loan-to-value caps are lower on multi-unit property.

See our guide to refinancing investment property in Florida.

Cash-out is available within those caps.

DSCR refinances use the building's rent.

Plan the refinance when you buy.

Selling a fourplex

Buyers are investors and house-hackers.

Rent rolls and leases sell the building, along with expense records.

A 1031 exchange can defer gains on a rental.

See our guide to 1031 exchanges and financing in Florida.

Keep the records from day one.

Reserves

Vacancy and turnover across four units require cash, and so do repairs.

Lenders require reserves; you should hold more.

See our guide to large deposits and source of funds in Florida.

A roof on a fourplex is a large single expense.

Budget it.

Buying with tenants in place

Existing leases transfer to you at closing.

Security deposits transfer too, and Florida law governs how you hold them.

Estoppel letters from each tenant confirm the rent and deposit.

See our guide to using rental income to qualify in Florida.

Review every lease before you offer.

Where to start

Decide whether you will live in a unit, since that sets the programme.

Pull the permit record and the rent roll.

Then get a pre-approval and run the self-sufficiency test on any building you consider.