Houston's small multifamily stock looks different from older Northern cities. Instead of century-old two-flats, you find 1960s and 1970s brick fourplexes on the southwest side, wood-frame duplexes in the East End and Near Northside, and new infill duplexes on inner-loop lots.
In short: LendingStreet finances Houston 2-4 unit rentals with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum, 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.
Fourplexes are concentrated in neighborhoods that grew fast in the 1960s through 1980s: Gulfton, Sharpstown, Alief, parts of Spring Branch and pockets near Hobby Airport. Many are two-story brick buildings with four two-bedroom units and surface parking.
Inside the loop, older duplexes and garage apartments show up in the East End (Second Ward), Eastwood, the Near Northside, Third Ward and parts of the Heights and Montrose. Newer side-by-side and up-down duplexes have also been built on infill lots across the inner city.
| Property type | Where you see it | Typical issue |
|---|---|---|
| 1970s brick fourplex | Gulfton, Sharpstown, Alief, Spring Branch | Roofs, plumbing, foundation movement |
| Older duplex or garage apartment | East End, Eastwood, Near Northside, Third Ward | Deferred maintenance; separate metering |
| New infill duplex | Inner-loop lots, Heights edges, Montrose | Higher taxes on new value; HOA or shared drive |
| Suburban duplex | Pasadena, Baytown, Pearland | Lower rents; check MUD taxes |
Houston is the largest U.S. city without a zoning code, so a duplex or fourplex is not barred by a zoning district the way it can be elsewhere. That does not mean any lot can hold one. Many neighborhoods have deed restrictions that limit lots to one single-family home, and the city's development rules on lot size, setbacks and parking still apply to new construction.
Before buying, confirm that the existing units were legally built and permitted, and read the recorded deed restrictions. An unpermitted garage apartment may not be counted by the appraiser.
A 2-4 unit DSCR loan adds up the rent from every unit. Leases are used where they exist, and the appraiser's market rent estimate fills in vacant units. In Houston, rents vary widely by submarket, so a fourplex in Gulfton and a duplex near the Heights are not comparable even at similar prices.
Utilities matter too. Many older Houston fourplexes are on one water meter, and if the owner pays water and sewer, that expense reduces what the building really nets even though the DSCR calculation focuses on rent, taxes, insurance and the loan payment.
This example is illustrative and not a quote. An investor buys a 1970s brick fourplex in southwest Houston for $520,000. Each of the four units rents for $1,150, for $4,600 a month combined.
At 75% LTV the loan is $390,000. Estimated principal and interest is about $2,714. Taxes are budgeted at $1,040 a month and insurance at $350, for a total of about $4,104. DSCR is about 1.12x.
For comparison, an East End duplex bought for $395,000 and renting for $3,100 combined, financed at 75% LTV, carries a payment of about $3,058 and a DSCR of about 1.01x.
| Item | SW Houston fourplex | East End duplex |
|---|---|---|
| Purchase price | $520,000 | $395,000 |
| Loan at 75% LTV | $390,000 | $296,250 |
| Estimated principal and interest | $2,714 | $2,061 |
| Taxes and insurance | $1,390 | $997 |
| Total monthly payment | $4,104 | $3,058 |
| Combined rent | $4,600 | $3,100 |
| DSCR | About 1.12x | About 1.01x |
Texas property taxes are high compared with many states, and 2-4 unit rentals get no homestead exemption. Harris County, the City of Houston, Houston ISD or another school district, the community college district and other units all add to the bill. New infill duplexes are taxed on their new value, which can surprise buyers who compare them with older buildings nearby.
Use the Harris Central Appraisal District record for the exact parcel and budget on the full rate.
Houston's clay soils expand and contract, and foundation movement is common in older slab buildings. A structural inspection is worth the cost on a fourplex. Flooding is the other question: check the FEMA flood map and ask for flood history, especially near Brays, Sims and Greens bayous.
Insurance on older brick fourplexes has risen with storm losses. Get a quote with the wind deductible before you set your offer.
Hurricane Beryl in 2024 left much of the metro without power for days. Buildings with older electrical panels, shared meters or flat roofs deserve a closer look, since insurers and appraisers will ask about them.
Some Houston buildings that look like fourplexes have five to eight units. Those are still residential for our programs but can carry lower maximum LTV, varying by program. See our Houston 5-8 unit DSCR page. Buildings with 9 or more units are commercial, covered on our multifamily loans page.
Many Houston owners bought small multifamily years ago and now want to pull equity for the next purchase or replace a short-term loan. A cash-out refinance goes up to 75% LTV and a rate-and-term refinance up to 80% LTV on some programs, as long as the combined rent clears the program minimum at the new payment. Cash-out seasoning varies by program.
Investors who bought a tired fourplex with a bridge or fix and flip loan, renovated the units and raised rents often refinance into a 30-year DSCR loan once the units are leased. The appraisal will look at both the renovated condition and the new leases, so keep invoices, permits and signed leases organized.
If the building's rents have not caught up with the market yet, it can make sense to wait until a few leases renew before refinancing. A higher combined rent supports a larger loan at the same ratio.
Send the address, price, unit mix, current rents or leases and the tax record. The financing team will run the combined-rent ratio at a couple of loan amounts. Use the form below or call (877) 298-1001.
Yes. DSCR loans qualify on the combined rent of all four units, with no W-2s or tax returns required.
Houston has no zoning code, but deed restrictions and city development rules can still limit a lot to one home. Check the recorded restrictions on the parcel.
Signed leases are used where they exist, and the appraiser's market rent estimate is used for vacant units, depending on the program.
Often not. If a unit was not legally built, the appraiser may not count its rent or value.
Usually, because it is taxed on its new value. Budget on the full rate with no homestead exemption.
Yes, up to 75% LTV, if the combined rent clears the program minimum at the new payment. Seasoning rules vary by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Five to eight units are still residential for our programs, with leverage that varies by program.
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