Quick answer
A 2-4 unit DSCR loan qualifies a small multifamily rental on the combined rent of all units versus the property’s total payment. It is for investors who will not occupy any unit; owner-occupied house hacking is not eligible.
Who this fits
- Investors buying a duplex or fourplex as a pure rental
- Owners refinancing a small multifamily with stable leases
- Investors moving up from single-family rentals
Rent schedules for multiple units
The appraiser will typically prepare a rent schedule for each unit. If some units are leased and others are vacant, lenders differ on how they blend actual leases with market rent. Have current leases and a simple rent roll ready.
Older Texas fourplexes often have deferred maintenance that shows up in the appraisal. Lenders want the property rent-ready, so a condition issue can be as important as the ratio.
Not for house hacking
Living in one unit and renting the others is an owner-occupied arrangement, and that is outside what we arrange. Every unit must be a rental, and the loan must be for business purposes.
The Texas angle. Insurance on older multi-unit buildings can vary a lot by carrier, especially near the coast. Get quotes early — a surprise premium can undo a good-looking rent roll.
Common questions
Can I live in one unit of a fourplex with this loan?
No. These are business-purpose loans for non-owner-occupied property only. If you plan to live in any unit, we cannot arrange that loan.
What about five or more units?
Five-plus units is commercial multifamily, which is underwritten differently. Tell us about the property and we will let you know whether it fits programs we work with.
Program availability, eligibility, and terms vary by lender and are subject to underwriting and lender/investor approval. Business-purpose, non-owner-occupied investment property only.