Imagine buying a $100K property with only $5K’: Fannie Mae slashed its down payment requirements to just 5% for multi-family homes — and real estate moguls are smiling. Should you jump in?

It just became a whole lot easier for budding real estate investors to get a foot on the multi-family property ladder.

On Nov. 18, Fannie Mae — the government-sponsored enterprise (GSE) focused on improving home affordability — slashed its down payment requirements for owner-occupied, multi-family (2-4 unit) properties from 15%-25% to 5%.

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That means you can buy a duplex, triplex or fourplex with just 5% down, live in one unit and then earn passive income from collecting rent on the other units. You can then use that rent money to pay your mortgage and other recurring housing costs like taxes, insurance and maintenance.

This announcement has caused quite the buzz among real estate investors, including Grant Cardone, who has long touted the benefits of multi-family real estate as one of the best ways to generate cash flow. He turned to X to express his excitement: “Imagine buying [a] $100,000 property with only $5,000.”

While that $100,000 price tag for a 2-4 unit property may seem like a pipe dream in today’s housing market, Cardone does have a point: it just got much easier to get certain GSE loans — but as always, there’s a catch.

Affordable home financing

Rental apartments are typically thought of as being in large, high-rise property — but that’s not always the case. Approximately 7% of all homes in the U.S. — and one in six rental units — are part of a 2-4 unit building, according to the most recent American Housing Survey.

Historically, one of the biggest barriers families face in obtaining a Fannie Mae-backed mortgage on a 2-4-unit residence has been the significant down payment needed to satisfy the maximum allowable loan limits set each year by the Federal Housing Finance Agency (FHFA). Until recently, that number was 15% for a duplex and 25% for a triplex or fourplex.