The house pays part of the mortgage
A rowhome that was split into two apartments in 1950 is a duplex, and lenders treat it like a home you live in, with a rental attached. That’s the whole appeal. You get the owner-occupied down payment, the owner-occupied pricing, and a tenant who covers part of the bill. West Philly Victorians cut into three, South Philly corner buildings with a storefront apartment upstairs, Fishtown triplexes that used to be a bar with rooms above: somebody lends on all of it.
Lenders count a share of the rent from the units you don’t occupy, based on the appraiser’s market rent or existing leases. How much of it, and what paperwork proves it, depends on the loan type, so ask the lender for the number before you count on it. The rent doesn’t have to cover the whole payment for the loan to work on a duplex. On a triplex or fourplex with FHA, it has to come close, and that’s the test below.
FHA on 2–4 units
FHA insures one- to four-unit homes as long as one borrower lives there, moves in within 60 days, and stays at least a year. The down payment is 3.5% with a 580 credit score, 10% between 500 and 579, though most lenders overlay a higher floor. Upfront mortgage insurance is 1.75% of the loan, and the annual premium at 3.5% down is 0.55% for the life of the loan on amounts up to the published threshold.
The 2026 limits for Philadelphia and the four collar counties:
| Units | 2026 FHA limit | 2026 conforming limit |
|---|---|---|
| 1 | $630,200 | $832,750 |
| 2 | $806,750 | $1,066,250 |
| 3 | $975,200 | $1,288,800 |
| 4 | $1,211,950 | $1,601,750 |
An FHA appraiser inspects every unit, and on a 1920s building that means every porch rail, every window sash, and every patch of peeling paint in every apartment. The rowhome appraisal guide explains what gets flagged. The FHA page covers the rest of the program.
Conventional at 5% down
Fannie Mae raised the maximum loan-to-value on owner-occupied 2–4 units to 95% in late 2023, and Freddie Mac followed on September 29, 2025, so 5% down is now standard on both. Freddie’s Home Possible allows the same 95% on fixed-rate loans, with 3–4 unit adjustable-rate loans capped at 75%, for buyers under 80% of the area median income. When the loan is above 80% of value, Freddie wants at least 3% to come from your own funds.
The trade against FHA is mortgage insurance. Conventional PMI can be cancelled when you reach 20% equity, and the servicer has to drop it at 78% of the original value. FHA’s annual premium at 3.5% down stays for the life of the loan. With 5% down and a 620 or better score, a conventional loan on a Fishtown duplex often ends up cheaper over ten years, as an estimate the lender can run. The conventional page has the details.
The self-sufficiency test
This is the rule that decides most FHA triplex and fourplex deals in the city, and it’s a test of the building. FHA requires that 75% of the appraiser’s fair-market rent for all the units, including the one you’ll live in, be at least equal to the full monthly payment: principal, interest, taxes, insurance, and MIP. The appraiser documents it on a HUD form. Duplexes are exempt.
Take a West Philly triplex where the appraiser sets rents at $1,500, $1,500, and $1,400. That’s $4,400 a month, and 75% is $3,300. If the full payment comes to $3,100, it passes. If the payment is $3,500, it fails, and no amount of your own income fixes it. The test is why a triplex in Cedar Park with three decent apartments is easier to finance with FHA than a bigger one in Spruce Hill with one huge owner’s unit and two studios. Conventional loans don’t run this test, which is one more reason the 5% program matters.
South Philly, West Philly, Fishtown, and the grants
The transfer tax doesn’t care how many units you have. A $500,000 triplex in the city pays $22,890 at 4.578%, and your customary half is $11,445. Across the line in Upper Darby it’s $12,500 total at 2.5%. Then apply for the $100,000 homestead exemption on the unit you live in, which cuts up to $1,399 a year from the bill at the city’s 1.3998% rate.
Philly First Home pays up to $10,000 toward a single-family home or a duplex in Philadelphia. A triplex doesn’t qualify, and neither does a fourplex. If the grant is a big part of your down payment, the second unit is the last one the city will help you buy.
PHFA’s Keystone Home Loan allows a duplex at up to 10% above its single-unit price limit, which in Philadelphia, a targeted county, is $730,600 for one unit. Its K-FIT assistance covers 5% of the price, forgiven over ten years, with a 660 score. Near the universities, Drexel employees get $15,000 forgivable between 31st and 48th Streets, Girard to Chestnut, and Temple employees get $5,000 in 19121, 19122, 19132, 19133, and 19140, and both work on an owner-occupied multi-unit inside the boundary. The South Philadelphia page covers that side of town.
Philadelphia requires landlords to be licensed and inspected, and we won’t summarize the rules here. Ask the lender what they need at closing and confirm the current requirements with the city before the tenant upstairs signs anything.
Start with one call
Tell us the address, how many units, and what they rent for. The lender who calls you back does owner-occupied 2–4 units in the city, and the rent math on the actual address gets run in one call. Call us.