What Is a Multi-Family Generational Home?

If you’re exploring ways to live with more of your family under one roof, you may have come across the term multi-family generational home.

For some families, that might mean a duplex where parents live on one side and adult children on the other. For others, it’s a single-family house with an in-law suite or basement apartment. Read on to learn which type of home could be the best fit for your family.

Step One: Consult with a Trusted Buyer's Agent

Tell us a little bit about your plans (where you’re looking to buy and when you want to make a purchase), and we’ll connect you with top-rated buyer’s agents in your area. It takes only a few minutes, and it’s free.

Get Started

Defining a multi-family generational home

The terms “multigenerational” and “multi-family” are sometimes used interchangeably, even though they technically describe different setups. Nevertheless, if you’re researching these or similar phrases, you’re probably looking into different living arrangements to solve a life challenge.

Here are some definitions that might help you narrow down your preferences:

What is a multigenerational home?
A traditional “multigenerational home” generally refers to a single-family house designed for multiple generations to live together. Such a home might include parents, grandparents, great-grandparents, and children all under one roof. The home will likely feature additional living spaces such as a finished basement, casita or accessory dwelling unit (ADU), FROG (finished room over garage), or a separate suite that provides privacy for everyone in the household.

What is a multi-family home?
A multi-family home, on the other hand, is legally structured as more than one living unit. Examples include duplexes, triplexes, and fourplexes. You’ll typically find separate entrances, kitchens, and sometimes separate utilities. While many owners rent these units out for passive income, they can also be used for related family members who want (or need) to live close but maintain more independence.

Where the ‘multi’ home lines blur
When people search for a “multi-family generational home,” they may actually be looking for either option — a true multi-family property or a single-family home built with multigenerational living in mind. A multi-family home is not so much defined by square footage as it is by layout and usability. No matter which definition you use, what matters most is finding a home that works for your family’s situation.

Why families choose multi-family generational living

If you’re weighing this lifestyle, you’re not alone — it’s an option that has been growing faster since the pandemic shook things up. According to USA Today, homes with at least two generations of adults over 24 or grandparents with younger grandchildren quadrupled between 1971 and 2021. More families throughout the United States are choosing to combine households for practical and personal reasons:

• Providing care for older family members: In a recent survey by Rocket Mortgage, providing care for older family members was cited as the top reason for choosing a multigenerational home.
• Helping with housing costs: In the same survey, affordability and saving money were reported as the next top reasons for sharing a property. Pooling resources can cut costs and ease burdens.
• Spending more time with family: Family connection is also among the top reasons families choose multi-family generational living. Time together can strengthen relationships and provide emotional support.
• Assistance with child care: Having grandparents or other family members nearby can provide built-in child care, an expense that spiked 29% from 2020 to 2024.
• Flexibility for the future: Some multi-family generational home setups allow you to rent out part of the home when it’s not needed, adding an extra layer of financial security if and when it’s necessary.

Drawbacks of multi-family generational homes

As you can see, choosing to make the move to a multi-family generational home comes with many benefits, but there are also drawbacks to consider:

• Privacy challenges: Sharing a home with multiple adults and/or children can make it harder to maintain your personal space and time.
• Family conflicts: Differences in routines, habits, or parenting styles can lead to tension and sharp disagreements.
• Lifestyle adjustments: Combining households often requires compromise on noise, chores, schedules, from bathroom time to kitchen time.
• Resale limitations: Depending on the property and location, multi-family generational homes may appeal to a smaller pool of buyers when it’s time to sell.
• Zoning restrictions: Local laws may limit how a home can be used or renovated for multigenerational living. Even if zoning allows it, neighbors may push back.
• Financing complexities: Mortgages for multi-family homes or single-family homes with in-law suites can come with stricter requirements.

What to look for in a multi-family generational home

If you’re starting your search for a multi-family generational home, the right features can make a huge difference in how comfortable everyone feels — and how well they get along. Here are some things to look for:

• Separate entrances or suites: Simply having a separate door (that locks) can allow each generation to have their own space while still being close by.
• Kitchens or kitchenettes: Cooking and food can be very personal. Having more than one kitchen area can cut down on daily friction.
• Basic accessibility: Features like single-level living, wide doorways, and grab bars can help aging relatives live safely and comfortably.
• Parking and storage: More people in a home usually means more cars and belongings. Consider whether the property has enough space for both.
• Local zoning now and in the future: Some municipalities restrict the use of multi-family or accessory dwelling units, while others may have changing landscapes and zoning laws. 

If you’re serious about making a move, connecting with a local agent who knows the ins and outs of multigenerational and multi-family housing can help you avoid pitfalls and guide you to the best home for your needs.

Financing a multi-family generational home

How you finance your purchase depends on whether the home is classified as a single-family property or a multi-family property. Here are some insights that can help:

• Multi-family (2–4 units): If you plan to live in one of the units, these homes often qualify for conventional, FHA, or VA loans. Lenders will also consider the property’s rental income potential, which might help you qualify.
• Single-family with an ADU or in-law suite: Homes with extra or separate living space are usually treated like traditional single-family mortgages. However, the presence of extra kitchens or separate entrances can sometimes raise questions during underwriting.
• Down payments: Again, if you live on the property, some home loan programs allow lower down payments for owner-occupied multi-family homes, making them more accessible.

Financing rules can vary by location and home type. When you’re ready to buy, it’s best to find a lender familiar with multi-family and multigenerational homes in your selected market. An experienced local lender and agent can help you avoid surprises — and headaches.