Owner Occupied + Rental Program

The Owner-Occupied + Rental mortgage program may very well be the least known and least advertised mortgage program, but as you will soon see, it should not be. Since you have probably never heard of it before, let’s define the program before we continue.

The Owner-Occupied + Rental mortgage program makes it possible for eligible borrowers to purchase a principal residence with less than 20% down payment, rent out all but one unit of the property, use the rental income for mortgage qualification purposes, and qualify for their mortgage under owner-occupied guidelines and interest rates. As long as the property is residentially zoned, with no more than four units, all units are legally zoned, and at least one unit is owner-occupied.

In a nutshell, this is the only residential, insured mortgage program that allows a borrower to purchase a principal residence with less than 20% down payment, legally rent out part of the property, qualify under principal residence mortgage guidelines and use some of the rent to qualify for their mortgage. We will look at some of its benefits below, but as you can see, for some homeowners, this program may be their ultimate “have your cake and eat it too” homeownership solution.

Owner Occupied + Rental mortgage program applications must meet at least the following requirements:

  • One unit Must be Owner Occupied: At least one unit must be owner-occupied. This is an owner-occupied mortgage program, and thus investment properties are ineligible.
  • Residential Properties Only: The property must be residentially zoned. No commercial component is allowed.
  • No More Than Four Units: The number of units in eligible properties may not exceed four.
  • Legal, Conforming Units Only: All units must meet municipal zoning criteria and be fully self-contained units.
  • 1 and 2 Units Minimum Down Payment: Follow principal residence mortgage guidelines
  • 3 and 4 Units Minimum Down Payment: Minimum 10% down payment. Follow principal residence mortgage guidelines.

Let’s explore the program’s benefits:

  • A Principal Residence with Rental Income: Outside of this program, it usually is illegal to rent out any part of a principal residence. If at least one unit is owner-occupied, this program allows for up to three conforming, legal units to be rented out.
  • Principal Residence Qualification Criteria & Interest Rates: Investment property mortgages are usually qualified under different and stricter mortgage guidelines and higher interest rates. Under this program, borrowers can qualify for their mortgages under more favourable principal residence guidelines and interest rates.
  • Less Than 20% Down Payment: Investment properties require a minimum 20% down payment, but this program allows borrowers to purchase a suitable principal residence with a down payment of less than 20% and legally rent out the non-owner-occupied, legal units.
  • Increased Purchase Power: This program allows lenders to add a portion of the rental income from non-owner-occupied, legal units to the borrower’s personal income. The resulting higher application income increases the borrower’s purchase power compared to a single-family zoned property purchase.
  • Reduced Home Ownership Costs: All things being equal, the rental income from the non-owner occupied units, which would have been prohibited for a single-family principal residence, should reduce the home’s ownership costs.

Although the Owner Occupied + Rental mortgage program may not be for everyone, and even though eligible properties are not commonly available, this program may be a good solution for someone to get into the housing market or who wants to reduce their homeownership expenses.

Some properties and/or programs, including, without limitation, these below, are ineligible for the Owner-Occupied + Rental mortgage program:

  • Investment properties
  • Secondary Homes
  • Single-family dwellings.
  • Commercial properties in any way
  • More than four residential units
  • Borrowed Down Payment Program
  • Rooming houses
  • Rental Pools
  • Time-share Properties
  • Etc.

We are here to solve your mortgage problems, so contact us if you are interested in the Owner Occupied + Rental mortgage program.


  • For information and illustrative purposes only.
  • Based on estimates. Estimates are based on randomly generated values for illustrative purposes. These estimates should not be used for decision-making purposes, and actual values could differ vastly from these estimates.
  • Not for decision-making purposes.
  • Subject to lender approval and terms & conditions
  • In any and all cases of conflict of any kind, lender rules, guidelines, terms & conditions, interest rates, etc., supersedes these.
  • Subject to change in any or all ways, at any time, without prior notification or warning.
  • Does not include all guidelines, mortgage rules, etc.
  • These are general guidelines and are not specific to any particular lender. Lenders don’t all have the same products, underwriting guidelines, etc.
  • Subject to all borrowers seeking independent professional advice from any and all providers, at their own and sole discretion prior to applying for the mortgage.
  • E&O.E.