Matt Picaro runs a house-hacking operation on Long Island using FHA 203K loans to fuel his growth. He owns three owner-occupied units and deploys the 203K program, which requires just 3.5% down, to finance renovations and acquisitions simultaneously.
The 203K loan structure works for Picaro's model. These FHA-backed mortgages wrap purchase price and renovation costs into a single loan, letting borrowers occupy the property while repairs happen. That translates to lower capital requirements upfront. By living in his deals, Picaro qualifies for owner-occupied rates and terms while building equity faster than traditional rental investors.
His strategy hinges on flipping value through renovation while maintaining owner-occupancy status. The 3.5% down requirement means Picaro can deploy capital across multiple properties rather than sink 20-25% into each one. On a typical $300,000 Long Island property, that's $21,000 in down payment versus $75,000. The savings compound across his portfolio.
The Long Island market presents both opportunity and constraint. Property prices run high relative to upstate New York, but the owner-occupied rental market remains competitive. Picaro's approach works because he doesn't need to qualify as a landlord initially. He moves in, rehabs the unit, then either keeps it as rental income or sells it after appreciation.
FHA 203K loans carry trade-offs. Mortgage insurance (MIP) runs higher than conventional financing. The program caps at $822,375 in most U.S. markets, restricting scaling in expensive areas. Appraisers must approve the renovation scope before funding, adding timeline and red tape. Picaro accepts these friction points because the 3.5% down and owner-occupied rates unlock deals competitors can't underwrite.
For Long Island buyers