Few American cities have as many three-family houses per block as Hartford. The stacked flats of Parkville, Frog Hollow and the South End are the backbone of its rental market, and two-families fill the suburbs from West Hartford to Wethersfield.
In short: LendingStreet finances Hartford-area two-, three- and four-family rentals with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Loans start at $150,000, purchases go up to 80% LTV, cash-out goes up to 75% LTV, the standard minimum DSCR is 1.0x and the minimum credit score is 620. LLC borrowers are standard.
Three-families, built mostly from the 1890s through the 1920s, dominate Parkville, Frog Hollow, the South End, Barry Square, Behind the Rocks and parts of the North End. Each floor is a full apartment, often with two or three bedrooms. Two-families, both stacked and side-by-side, are common across the city and in East Hartford, Wethersfield, Newington and West Hartford's Elmwood section. True fourplexes are less common but appear in the city and New Britain.
Prices for city three-families have risen in recent years but generally remain below what similar buildings cost closer to Boston or New York, which is why investors from those markets buy here.
That price gap shows up in the ratio. A city three-family often produces enough rent to clear 1.0x comfortably at normal leverage, while a suburban two-family at a higher price and tax bill may need a larger down payment. Knowing which side of that line a building sits on helps you set your offer.
Confirm the building's legal unit count with the town's zoning and building departments. Some Hartford three-families have had attic or basement units added without permits, and some two-families in the suburbs are legally single-family homes with an unpermitted apartment. Lenders and appraisers will generally value the building at its legal unit count, so a three-family with an illegal fourth unit is usually financed as a three-family.
If you plan to add a unit, Connecticut's recent housing laws have encouraged towns to allow accessory apartments, but each town's zoning still controls the details.
This example is illustrative and not a quote. A three-family in Barry Square costs $345,000, with three units at $1,400, $4,200 a month. Taxes are about $720 and insurance $260 a month. At 75% LTV the loan is $258,750, estimated principal and interest is about $1,765, the payment is about $2,745 and the DSCR is about 1.53x.
A two-family in West Hartford costs $475,000, with two units at $1,900, $3,800 a month. Taxes are about $1,050 and insurance $190. At 75% LTV the loan is $356,250, the payment is about $3,670 and the DSCR is about 1.04x, barely over 1.0x. At 70% LTV, the loan is $332,500, the payment is about $3,508 and the DSCR is about 1.08x. West Hartford's schools and amenities support rents and values, but the higher price and tax bill thin the ratio.
| Item | Barry Square three-family | West Hartford two-family |
|---|---|---|
| Purchase price | $345,000 | $475,000 |
| Combined rent | $4,200 | $3,800 |
| Loan at 75% LTV | $258,750 | $356,250 |
| Estimated principal and interest | $1,765 | $2,430 |
| Taxes and insurance | $980 | $1,240 |
| Total payment | $2,745 | $3,670 |
| DSCR | 1.53x | 1.04x |
Connecticut assesses real estate at a 70% assessment ratio and requires towns to revalue at least every five years. Hartford's mill rate has long been among the highest in the state, and suburban mill rates vary widely. Use the actual bill for the parcel and check when the next revaluation is scheduled, since it can change the tax line on a building you just bought.
Tenants include staff at Hartford Hospital, Saint Francis, Connecticut Children's and UConn Health, employees of the insurers and Pratt and Whitney, state workers, and students at Trinity, the University of Hartford and UConn's Hartford campus. Larger three-family units often rent to families.
Towns with 25,000 or more residents must have a fair rent commission that can review rent increases tenants consider harsh and unconscionable. Lenders count rent in place or a supportable market rent, not a planned increase.
Vacancy at closing can lower the qualifying rent, depending on the program. If a floor is empty, have a lease signed before you close, or expect the lender to rely on a market rent estimate from the appraisal.
Three-families bring familiar issues: wooden porches, older electrical service, shared or aging boilers, and lead-based paint in pre-1978 housing. In north-central and eastern Connecticut, some later-built homes have foundations affected by pyrrhotite, so ask about testing on suburban buildings in affected towns.
Insurance on older multi-family buildings can also be harder to place. Some carriers ask about wiring, roof age, heating systems and porch condition before they write a policy, so get a quote early and include it in your numbers.
Hartford's perfect sixes and other buildings with five to eight units are still residential for our DSCR programs, though maximum LTV can be lower and varies by program; see our Hartford 5-8 unit page. Buildings with nine or more units are commercial. If you own five or more buildings, a blanket loan can combine them.
Send the address, price or current balance, unit mix, leases and tax bill through the form below, or call (877) 298-1001. We will run the combined-rent DSCR at a few leverage levels and come back with options.
For a refinance, include the current mortgage statement and a list of recent work, such as porches, boilers, roofs or unit renovations. For a purchase, include the seller's rent roll and any inspection report. The more complete the file, the faster you get a firm answer on loan size.
Yes. The loan qualifies on the combined rent of all three units, with no personal income documents.
The building will generally be valued and financed at its legal unit count.
Higher prices and tax bills relative to rent. Many West Hartford deals need lower leverage to clear 1.0x.
At a 70% assessment ratio, with town revaluations at least every five years.
They can review increases tenants consider harsh. Lenders count rent in place or supportable market rent.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Yes, up to 75% LTV, with seasoning that varies by program.
Yes, along with Wethersfield, Newington, Manchester, Windsor and the rest of the Hartford area, as long as the property is a non-owner-occupied rental.
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