Can you use an FHA loan for an investment property?

Not for a pure rental. FHA loans are owner-occupied only; you must live in the property as your primary residence. The investor workaround is house hacking: buy a two-to-four-unit with FHA, live in one unit, and rent the others. For a property you will not occupy, FHA is off the table and DSCR fits.

Is a DSCR loan or FHA cheaper for a house hacker?

FHA wins on the down payment, as little as 3.5 percent, but you must live there and you pay mortgage insurance. DSCR needs 20 to 25 percent down and no occupancy. If you will live in the property, FHA's low down is hard to beat; if you will not, DSCR is the only one of the two that works.

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DSCR Loan vs FHA Loan for Investors

Investors often compare DSCR and FHA because FHA's low down payment is tempting. The catch is occupancy: FHA requires you to live there. Here is how the two really compare, especially for house hackers.

By Owen Brandt, Research Editor. Updated June 13, 2026.

The DSCR-versus-FHA question usually comes from an investor eyeing FHA's tiny down payment. The honest answer turns on one rule: FHA requires you to live in the property. That single condition decides almost every case.

The core difference: occupancy

FHA. Owner-occupied only. You must live in the home as your primary residence, typically for at least a year. In exchange, the down payment can be as low as 3.5 percent, with mortgage insurance for the life of most loans.
DSCR. Investment only. You do not live there; the property's rent qualifies the loan. The down payment runs 20 to 25 percent, with no occupancy requirement and no personal income check. See can you live in a DSCR loan property.

Where they overlap: house hacking

The one place the two compete is house hacking a two-to-four-unit property. You can buy it with FHA at a low down payment, live in one unit, and rent the others. That is the cheapest way into small multifamily, but you must occupy a unit. When you later buy a property you will not live in, FHA is gone and DSCR is the tool. See DSCR loans for multifamily.

How to choose

If you will live in the property, FHA's low down payment is hard to beat, and house hacking is a proven first move. If you will not live there, FHA is not available and a DSCR loan is the investor's path. For other comparisons, see DSCR vs conventional. Check your standing with the pre-qualifier.