A multi-family residence is a residential property containing two or more separate dwelling units, each with its own living facilities, under a single ownership structure. Common examples include duplexes, triplexes, fourplexes and larger apartment buildings.
Properties with two to four units are generally treated as residential for financing purposes, while five or more units typically fall under commercial lending guidelines. This distinction significantly affects available loan programs, underwriting requirements and appraisal methodology. For income-producing multi-family properties, appraisers may apply the income approach alongside the sales comparison approach to develop a credible value opinion.
Loan originators should confirm unit count and occupancy early in the process, as owner-occupancy requirements, rental income treatment and property eligibility vary considerably across loan programs and property configurations.