What 5–8 unit DSCR is
Conventional residential loans top out at four units; commercial loans start making sense much higher. The 5–8 unit DSCR loan covers the missing middle: small apartment buildings from $350K to $3M, qualified on the building's rental income rather than your personal income. Full program details →
How qualifying works
Sample qualifying snapshot: A strong file shows (1) gross scheduled rents supporting the payment at the program's target coverage; (2) an appraisal with an income approach and rent schedule for small multifamily; (3) down payment and post-closing reserves from liquid accounts; (4) acceptable credit for the tier. Exact ratio minimums, reserve rules, and credit tiers vary by investor and are subject to change.
Underwriting looks at the building like a small business: scheduled rent, vacancy assumptions, operating expenses, and the resulting net operating income against the mortgage payment. Your personal DTI is not the driver.
3 qualifying scenarios
Scenario 1 — Stepping up from single-family: An investor with six SFRs buys an 8-unit in a working-class neighborhood. The building's rents cover the payment 1.2x. One DSCR loan replaces the complexity of a commercial application.
Scenario 2 — Value-add 6-unit: A buyer targets a half-vacant 6-unit below market. The program underwrites on market rents from the rent schedule, giving credit for the lease-up upside.
Scenario 3 — LLC portfolio hold: An investor buys a 5-unit in an LLC for liability protection. The program allows entity vesting, and the building qualifies on its own income. Illustrative examples; exact terms vary by investor and are subject to change.
Check Your Eligibility — 5–8 Unit DSCR
60 seconds. No obligation, no hard credit pull. NMLS #7861.
Who 5–8 unit DSCR is NOT for
- Owner-occupants of small multifamily wanting house-hack FHA/conventional terms — different products serve that better.
- Buildings needing major rehab — DSCR is for stabilized or near-stabilized properties, not gut renovations.
- Borrowers below the loan minimum — very small buildings at low price points may fit single-family DSCR instead.
Frequently asked questions
What loan amounts does 5–8 unit DSCR cover?
Our program covers $350,000 to $3,000,000 — the small-balance multifamily range most banks won't touch efficiently.
How is rental income documented on a 6-unit?
Through the appraisal's income approach and rent schedule, plus current leases and a rent roll. Lenders typically use the lower of market or actual rents.
Can I use short-term rental income on a small apartment building?
Some programs allow it with the right documentation; most underwrite to long-term market rents. Ask before you assume.
Do I need commercial loan experience?
No — that's the point. This is residential-style underwriting applied to a small apartment building.
Skip the Bank Runaround.
Buying a 5–8 unit building? Send the unit count, rents, and price — we'll tell you if 5–8 unit DSCR fits and what your file needs.
Get Your 5–8 Unit DSCR Review
60 seconds. No obligation, no hard credit pull. NMLS #7861.
Guidelines change. Terms, pricing, and requirements vary by investor and are subject to change without notice. Examples in this article are illustrative only — not quotes, approvals, or commitments to lend. This article is educational, not loan advice. Confirm current guidelines with us before making an offer. NMLS #7861 · Equal Housing Opportunity.
