House hacking is an excellent strategy for entering the real estate market and building wealth by using rental income to cover mortgage payments. If you’re a Utah investor or first-time buyer, finding the right house hacking loans is key to making house hacking affordable and accessible. Here’s a comprehensive guide to the best loans and programs available to Utah house hackers, from federal programs to state-specific assistance options.
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Why Financing Matters for House Hacking
Financing plays a central role in house hacking, as it determines the amount you’ll need upfront, your monthly costs, and your cash flow potential. With the right loan program, house hacking becomes accessible, even for new investors with minimal savings. Utah offers a mix of national loan options, zero-down payment loans, and state-specific assistance to support a wide range of financial situations.
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Top Programs for House Hacking Loans in Utah
Several national and state-specific loan options are available to Utah house hackers, offering low down payments, flexible credit requirements, and targeted assistance for first-time buyers. Explore the Utah Housing Corporation’s programs for down payment assistance and affordable financing.
1. FHA Loans (Federal) – 3.5% Down
- Program Overview: FHA loans are popular among first-time buyers because they require only a 3.5% down payment for borrowers with a credit score of 580 or higher. For house hackers, FHA loans are particularly useful because they allow you to finance up to four units as long as you live in one. Review FHA loan guidelines to see if multi-family financing is right for you.
- Pros: Low down payment, flexible credit requirements, and allowance for multi-unit properties.
- Cons: Requires mortgage insurance, which adds to monthly costs.
2. USDA Loans (Federal) – 0% Down for Rural Areas
- Program Overview: The USDA loan program offers 100% financing for eligible rural properties, which includes many suburban areas in Utah. This loan could be ideal for house hackers who are open to living outside main urban centers and prefer lower upfront costs.
- Pros: Zero down payment, making it accessible for buyers with limited savings.
- Cons: Restricted to eligible rural areas, with income limits and requirements on the location.
3. VA Loans (Federal) – 0% Down for Veterans
- Program Overview: VA loans are available to qualified veterans and active-duty military members, offering zero-down financing and no mortgage insurance. This makes VA loans one of the best options for eligible house hackers who want to minimize upfront costs.
- Pros: Zero down, no PMI, competitive interest rates, and flexible terms for multi-family homes.
- Cons: Limited to veterans, active-duty military, and some reservists and National Guard members.
Utah-Specific Financing Programs for House Hacking
Utah offers several financing programs specifically for first-time buyers and those looking for low or zero down payment options. These programs are designed to help new homeowners overcome the initial financial hurdles of purchasing a home, making them ideal for house hacking.
1. Utah Housing Corporation (UHC) FirstHome Loan
- Program Overview: The Utah Housing Corporation’s FirstHome Loan is designed for first-time homebuyers and includes down payment assistance to help cover upfront costs. Eligible borrowers can secure financing for primary residences, including multi-family properties, allowing them to offset mortgage costs with rental income.
- Requirements: Available to first-time buyers who meet income limits and plan to occupy the property as their primary residence.
- Pros: Low down payment, down payment assistance, and available for multi-family properties.
- How to Apply: Apply through a UHC-approved participating lender. More details can be found on the UtahHousing Corporation’s website.
2. UHC HomeAgain Loan
- Program Overview: The HomeAgain Loan is available to first-time and repeat buyers, offering down payment assistance and flexible terms. For house hackers, this loan can be used on properties up to four units, making it a great option for those wanting to generate rental income.
- Requirements: Income limits apply, and the borrower must occupy the home.
- Pros: Includes down payment assistance and is available for multi-family homes.
- How to Apply: Work with an approved lender to confirm eligibility. Learn more on the UHC website.
3. UHC Score Loan for Low Credit Scores
- Program Overview: The Score Loan provides down payment assistance to Utah buyers with lower credit scores, making homeownership more accessible. This loan allows for multi-family properties, making it suitable for house hackers who may not yet have a high credit score.
- Requirements: Flexible credit requirements and income limits.
- Pros: Offers down payment assistance, and the program’s lenient credit requirements make it accessible to a broader range of buyers.
- How to Apply: Apply through participating lenders listed on the UHC website.
4. Salt Lake City Own in Salt Lake Program
- Program Overview: Salt Lake City offers the Own in Salt Lake Program, which provides down payment assistance of up to $15,000 for qualifying buyers. Although primarily focused on single-family homes, it’s a great choice for house hackers planning to rent out rooms or basement apartments.
- Requirements: Income limits apply, and the borrower must plan to live in the home.
- Pros: Significant down payment assistance, which can reduce initial investment costs for buyers in Salt Lake City.
- How to Apply: Contact the Salt Lake City Housing and Neighborhood Development Division or visit the program’s webpage.
Tips for Choosing the Best Financing Option for House Hacking
When choosing a financing option, it’s essential to consider your budget, location preference, and property type. Here are a few tips:
- Prioritize Low or No Down Payment Options: Programs like USDA, VA, and UHC loans minimize upfront costs, which is helpful for first-time buyers or those with limited savings.
- Check Multi-Unit Eligibility: Ensure your loan allows financing for multi-family properties if you plan to buy a duplex, triplex, or fourplex.
- Consider Long-Term Costs: Some loans, like FHA, require mortgage insurance, which adds to monthly costs. Evaluate how this impacts your cash flow over time.
Final Thoughts on Financing for House Hacking in Utah
Utah’s combination of national and state-specific loan programs makes house hacking accessible for both new and experienced investors. Whether you’re a first-time buyer with minimal savings or a veteran eligible for a VA loan, the right financing can help you purchase a property, start generating income, and build long-term wealth. With careful planning and the right resources, house hacking in Utah can be a profitable and sustainable investment strategy.
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