We investigate a minimal molecular model consisting of square planar plaquettes hosting multiple electrons, whose dynamics is governed by a tight-binding Hamiltonian supplemented by on-site Hubbard repulsion. By coupling this system to a spatially nonuniform cavity mode, we analyze the emergence of a magnetostatic instability, namely photon condensation, originating from the paramagnetic Van Vleck mechanism. The global behavior of the system is analyzed for different electronic filling factors, and we find that, except for the special cases of half-filling and a single electron, where the transition, if it occurs, is necessarily a second-order phase transition, the global system may also undergo a first-order transition because of the action of the electron-electron interaction. The polaritonic excitation energies are analyzed, providing clear spectroscopic signatures of the magnetostatic instability and of its order.