House hacking in Sacramento

What house hacking is

House hacking means buying a property with more than one living space, living in one of them, and renting the rest. The rent doesn't have to cover everything. The goal is simpler: your share of the housing cost ends up lower than what you'd pay to rent a similar place, and you're building equity in a building you own.

It works because you're buying as an owner-occupant. That unlocks loans with lower down payments than investor loans, and lenders can count part of the rent from the other units when you qualify.

Property types that work

Duplex, triplex, fourplex

This is the classic setup. You get one loan on 2–4 units and live in one of them. FHA and conventional owner-occupied financing both go up to four units. More units means more rent to offset the payment, but also a bigger loan and more to manage.

A house with an ADU

This means a single-family home with a legal accessory dwelling unit, such as a converted garage, a backyard cottage, or a junior ADU. You can live in the main house and rent the ADU, or the other way around. Always check that the unit is permitted, because an unpermitted unit may not count toward your income and can create problems at resale.

Renting rooms

This is the lowest-cost way in. Buy a regular home and rent spare bedrooms. It's harder to count toward qualifying and it means sharing your space, but it works with any property type.

Owner-occupancy rules

These loans exist for people who will live in the property. FHA expects you to move in within 60 days of closing and to live there as your primary residence for at least one year.

After that, you can move out and keep the property as a rental, and some people repeat the process. Buying as "owner-occupied" when you don't intend to live there is occupancy fraud. Don't.

FHA adds one more test on 3–4 unit properties. The expected net rent from all the units has to cover the full mortgage payment, which is called the self-sufficiency test. Fannie Mae dropped a similar requirement for conventional 5% down loans.

The five numbers to check on any listing

1. Your total monthly payment. That's principal, interest, property taxes, insurance, and mortgage insurance. Get a real quote. Don't use a website estimate.
2. Realistic rent on the other units, minus a cushion. Use current leases or actual comparable rentals, then subtract something for vacancy. Whatever you think it'll rent for, plan on a little less.
3. Repairs and replacements. Older multi-unit buildings need roofs, water heaters, and sewer lines. Set money aside every month, even when nothing is broken.
4. Utilities you pay. Many older 2–4 unit buildings have a single water or garbage bill. Find out which utilities are separately metered.
5. Your net housing cost against your current rent. Start with number 1, subtract the rent from number 2, and add numbers 3 and 4. That's what you'd really pay to live there. Compare it with what you pay today.

Run a listing

Plug in a real listing and a real loan quote. The numbers shown are example inputs, not a quote or a prediction. Replace every one.

If the net number is close to your rent, that's worth a closer look, and it's exactly what the free class and the First Property Review walk through.

Open the full calculator → It adds ADU and rent-by-room setups, FHA and conventional mortgage insurance, cash to close, the move-out view, and 10 years against your rent.

Being a landlord in California

California has statewide tenant protections, including rent caps and just-cause eviction rules (AB 1482), and some cities add their own. Some owner-occupied properties are exempt, and others aren't. Rules also cover security deposits, habitability, and fair housing. Talk to a landlord-tenant attorney before you sign a lease, and use a current, California-specific lease form.

Common mistakes

• Using the seller's rent numbers without checking the leases and comparable rentals
• Putting every dollar into the down payment and keeping nothing for reserves
• Buying a unit that was never permitted
• Forgetting the utilities the owner pays
• Skipping a sewer-line inspection on an older building
• Planning to move out before the occupancy requirement is met