Freddie Mac is making a major move to expand access to financing for multi-unit homeowners that could be a big win for would-be house hackers — owners who live in one unit of a home while renting out the others to offset their mortgage.
Effective Sept. 29, 2025, the company is raising the maximum loan-to-value (LTV), combined loan-to-value (CLTV), and high-balance TLTV/HTLTV ratios to 95% for 2- to 4-unit primary residences. The change applies only to purchase and rate-and-term refinance mortgages while excluding manually underwritten loans and super-conforming mortgages, which will remain capped at their current limits.
What’s Changing
- 2-unit primary residences: LTV limit increases from 85% → 95%
- 3- and 4-unit primary residences: LTV limit increases from 80% → 95%
For context, the cap for 1-unit primary residences remains at 95%, while investment properties and second homes see no change.
Why It Matters
By raising allowable leverage on multi-unit properties, Freddie Mac is opening the door for borrowers who want to buy or refinance duplexes, triplexes, and fourplexes with lower down payments. That means more opportunities for would-be homeowners who seek to live in a single unit while renting out the house’s other units.
As affordability continues to struggle, house hacking interest grows. Recent NMP reporting has shown how house hacking is gaining popularity among younger homebuyers, with more than half of Millennials and Gen Z saying it’s “very or extremely important” in their decision to purchase a home. And in 2023, Fannie Mae slashed down payment requirements for multifamily homes, paving the way for small multifamily financing flexibility that Freddie Mac is now extending further.
For originators, the change creates a fresh talking point with clients interested in building wealth through multi-unit ownership. With less cash required up front, these borrowers may now qualify for opportunities that were previously out of reach.
Industry Takeaway
Freddie Mac’s update is a clear signal of confidence in the multi-unit housing market, which continues to be a pressure valve for affordability challenges nationwide. While some may question the timing of loosening leverage standards, the move underscores a growing recognition of small multifamily homes as both an owner-occupant solution and an avenue for long-term wealth building.
Originators working with first-time buyers, real estate investors, or clients exploring income–producing properties should take note — and update their playbooks.
