House hacking means buying a 2- to 4-unit property, living in one unit, and renting out the others. The rent helps cover the mortgage. With rates above 7%, the question I get most is whether it still pencils out. Here's an honest breakdown, with the math shown so you can swap in your own numbers.
Why Owner-Occupants Have an Edge
Because you'll live there, you can use owner-occupant financing, which usually means a smaller down payment than an investor loan:
- FHA: 2- to 4-unit homes qualify, with as little as 3.5% down for borrowers with a credit score of 580 or higher. At least one borrower must move in within 60 days of closing and intend to live there for at least a year.
- Conventional: Fannie Mae's eligibility matrix allows up to 95% financing (5% down) on a 2- to 4-unit principal-residence purchase. Credit, reserve, and mortgage insurance requirements apply, so confirm current terms with a lender.
Lenders can often count part of the expected rent as income. For FHA, that's generally 75% of the lower of the appraiser's market rent or the lease amount, subject to FHA's rules. That can help you qualify for more than your paycheck alone would support.
The 3- and 4-Unit Catch: FHA's Self-Sufficiency Test
For 3- and 4-unit homes, FHA adds a test. The property's rent has to carry the full mortgage payment on its own.
Here's how HUD calculates it: take the appraiser's market rent for all units, including the one you'll live in. Subtract the greater of the appraiser's vacancy and maintenance estimate or 25%. What's left must be at least equal to the monthly payment (principal, interest, taxes, and insurance). Duplexes don't have this test.
Example Only: A Duplex
Example only — your numbers will differ. This is a made-up property with round assumptions, not a real listing or a market average.
- Purchase price: $400,000 (hypothetical)
- FHA loan, 3.5% down: $14,000 down
- Base loan $386,000, plus FHA's 1.75% upfront mortgage insurance ($6,755) rolled in: $392,755
- Rate: 7.40%, the Freddie Mac 30-year average as of October 8, 2026 (FHA rates can be higher or lower)
| Monthly cost | Amount |
|---|---|
| Principal & interest | $2,719 |
| FHA annual mortgage insurance (0.55%) | $177 |
| Property tax (assumption: $1.212 per $100 on a $400,000 assessment) | $404 |
| Insurance (assumption) | $175 |
| Total payment | $3,475 |
| Rent from the other unit (assumption) | −$1,800 |
| Set aside 25% of rent for vacancy, repairs, and big-ticket items | +$450 |
| Your net monthly housing cost | about $2,125 |
The tax assumption uses Baltimore County's real property rate of $1.10 per $100 of assessed value plus the state rate of $0.112. Your actual bill depends on the property's assessment and any credits.
How does that compare to renting? HUD's FY2027 Fair Market Rent for a two-bedroom in the Baltimore-Columbia-Towson metro area is $2,006 a month. That's a metro-wide benchmark that includes utilities and sits around the 40th percentile of rents, not a quote for any specific apartment. So in this example, you'd pay a bit more than HUD's rent benchmark before your own utilities, while paying down about $3,700 of principal in the first year and owning the building.
Notice what that isn't: free housing. At today's rates, a duplex with one rented unit usually lowers your housing cost rather than eliminating it.
Example Only: A Fourplex and the Self-Sufficiency Test
Example only — your numbers will differ. Say a hypothetical fourplex costs $600,000. With FHA's 3.5% down at 7.40%, plus assumed taxes and insurance, the payment comes to roughly $5,200 a month.
- If the appraiser says each unit rents for $1,500: $6,000 × 75% = $4,500. That's less than $5,200, so it fails the test.
- To pass, the four units would need to average about $1,735 in appraised market rent.
This is where many 3- and 4-unit deals fall apart with FHA. Ask your lender to run the test before you make an offer, not after the appraisal. FHA also requires reserves equal to three months of the full payment after closing on a 3- or 4-unit home, so plan for that cash too.
Landlord To-Dos in Baltimore County
- Rental license: Baltimore County requires you to register and be licensed before a tenant moves in. For properties with six or fewer units, that includes an inspection by a state-licensed home inspector.
- Lead rules: Maryland requires rental homes built before 1978 to be registered with the Maryland Department of the Environment, with a lead inspection certificate at each change in tenants.
- Baltimore City: has its own rental licensing program, separate from the county's.
- Make sure it's a legal multi-unit. Some "duplexes" are single-family homes that were split up without approval. Check the zoning and permit history before you count on that rent.
So, Is It Still Worth It?
It can be, if you go in clear-eyed:
- Worth a look if you plan to stay a few years, have savings for repairs and vacancies, and are comfortable being a landlord.
- Think twice if the deal only works with the highest possible rent, zero vacancy, and no repairs.
Run your numbers with real rent comps and a real insurance quote. Rentometer or recent rental listings can help you sanity-check rents, and an appraiser will have the final word for the loan.
Want to see what you'd pay as a renter instead? Read Should You Rent or Buy in Maryland Right Now? For current sale prices, see the Market Reports page.
Sources: HUD Single Family Housing Policy Handbook 4000.1; HUD Mortgagee Letter 2023-05 (FHA mortgage insurance premiums); Fannie Mae Eligibility Matrix (August 5, 2026); Freddie Mac Primary Mortgage Market Survey (October 8, 2026); HUD FY2027 Fair Market Rents, Baltimore-Columbia-Towson, MD MSA; Baltimore County, Tax Rates; Maryland Board of Public Works, FY2027 State property tax rate; Baltimore County, Register or Renew Your Rental Property; Maryland Department of the Environment, Lead Poisoning Prevention; Rentometer.
This is general information, not legal, tax, or lending advice — talk to your attorney, CPA, or lender about your situation.