Financing Multifamily Properties in Chicago: What You Need to Know

Investing in multifamily properties in Chicago can be a game-changer for building wealth and generating passive income. But figuring out how to finance these properties—especially if you’re a first-time homebuyer or looking for owner-occupied options—can feel overwhelming. The good news? You don’t necessarily need 20% down, and there are flexible loan programs that can help you break into the market. At Teton Properties, we specialize in helping investors and owner-occupants navigate these financing options while providing full-service property management to make your investment as seamless as possible.

Owner-Occupied vs. Non-Owner-Occupied Financing

The financing options available to you will vary depending on whether you plan to live in the property or rent out all the units.

Owner-Occupied Multifamily Loans: If you plan to live in one of the units, you can take advantage of lower down payment options, making it easier to acquire a property without a massive upfront investment.
Non-Owner-Occupied Multifamily Loans: If you plan to rent out all units and not live in the building, traditional investment property loans typically require 15-25% down, but they come with fewer restrictions.

First-Time Homebuyer Options: Lower Down Payments & FHA Loans

First-time homebuyers in Chicago have additional advantages when purchasing a multifamily property (as long as it’s a four-unit building or smaller).

FHA Loans: If the property qualifies, you may be able to purchase it with as little as 3.5% down. This is one of the best strategies for house hacking—living in one unit while renting out the others to cover your mortgage.
Conventional Loans: Some conventional loan programs allow as little as 5% down for owner-occupied multifamily properties, though 15% is more common for duplexes and 25% for triplexes and fourplexes.
Down Payment Assistance Programs: First-time buyers may also qualify for assistance programs that provide grants or low-interest loans to cover part of the down payment.

The Power of Refinancing: Building Equity & Lowering Costs

Once you’ve acquired your multifamily property, refinancing can be a key tool for optimizing your investment.

If interest rates drop, you may be able to refinance to secure a lower mortgage payment.
If you’ve added value to the property (through renovations, improved management, or higher rents), you may qualify for a cash-out refinance to reinvest in additional properties or improve your current one.
As long as you still live in the property, you can often refinance using owner-occupied loan programs, which tend to offer better rates and terms than traditional investment loans.

You Don’t Need 20% Down – Finding the Right Deal Matters

Many new investors assume they need a huge amount of cash to get started, but that’s not always the case. Whether you’re purchasing a turnkey property that’s already cash-flowing or a value-add opportunity that needs some work, the financing structure can look very different. An experienced mortgage broker can help you identify which loan products fit your situation best.

Partnering with the Right Experts

Having an experienced partner can make all the difference. A knowledgeable real estate broker will help you find properties that fit within the financing guidelines, and a reliable property management team will ensure your investment operates smoothly once you close the deal.

At Teton Properties, we specialize in managing multifamily and mixed-use properties in Chicago, offering proactive management, personalized service, and competitive rates at just 5% per month. Whether you need help securing tenants, maintaining your building, or maximizing your investment, we’re here to help.

Ready to Invest in Chicago Multifamily Properties?

If you’re looking for expert guidance on purchasing and managing a multifamily property in Chicago, Teton Properties is your trusted partner. Contact us today to learn more about how we can help you achieve your real estate investment goals!