Lexington's small multifamily stock sits mostly inside the older parts of the urban service area: duplexes and converted houses near the University of Kentucky, brick fourplexes from the 1960s and 1970s along major roads, and side-by-side duplexes in mid-century neighborhoods. With little room to build outward, existing 2-4 unit buildings hold their appeal.
In short: LendingStreet finances Lexington duplexes, triplexes and fourplexes with DSCR loans qualified on the combined rent of all units, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV, cash-out refinances up to 75% and the standard minimum DSCR is 1.0x. Near UK, make sure the rent you count fits Lexington's occupancy limits for unrelated tenants.
Near campus, duplexes and houses split into two or three units fill streets in Pralltown, Columbia Heights, Kenwick, Bell Court and the area around Transylvania University. Many are early 20th-century frame or brick homes. Along corridors such as Tates Creek Road, Nicholasville Road and Versailles Road, brick fourplexes and small apartment groupings from the 1960s and 1970s house workers and graduate students.
Side-by-side duplexes are common in mid-century neighborhoods like Gardenside and Southland and in parts of the north side. Newer duplexes appear in some suburban subdivisions, often with HOA rules.
| Building type | Where it is common | What to check |
|---|---|---|
| Converted older house, 2-3 units | Near UK and Transylvania | Legal unit count, separate meters, fire safety |
| Brick fourplex, 1960s-70s | Tates Creek, Nicholasville and Versailles Road corridors | Roof, HVAC, parking, laundry |
| Side-by-side duplex | Gardenside, Southland, north side | Basements, sewer lines, roof |
| Newer suburban duplex | Outer subdivisions | HOA leasing rules |
Lexington's zoning ordinance controls where two-family and multi-family buildings are allowed and limits how many unrelated adults can share a dwelling unit in many zones. Around UK, that limit has a direct effect on rent: a unit leased by the bedroom to more students than the zoning allows creates both legal risk and an appraisal problem, because the appraiser will use rent consistent with legal occupancy.
Confirm that every unit in the building is legal. Units added without permits may not count in the appraisal, which lowers the rent the DSCR can use.
Small-unit demand comes from UK students, residents and staff at UK HealthCare and Baptist Health, workers at the Toyota plant in Georgetown and other employers, and young professionals downtown. Units within walking distance of campus or a short drive to the hospitals rent fastest; student units follow an August lease cycle.
A DSCR loan adds rent from every unit, from leases or the appraiser's market rent, and divides it by the full monthly payment. Utilities you pay as landlord do not reduce the ratio but do affect your cash flow.
This example is illustrative and not a quote. An investor buys a side-by-side duplex near campus for $380,000, with each two-bedroom unit renting at $1,450 to tenants within the occupancy limit, or $2,900 combined. Taxes are budgeted at $300 a month and insurance at $150.
At 80% LTV the loan is $304,000, estimated principal and interest is about $2,126 and the total payment is about $2,576, for a DSCR of about 1.13x. At 75% LTV the loan is $285,000 and DSCR rises to about 1.19x, more cushion for the summer turnover that comes with student leases.
| Item | 80% LTV | 75% LTV |
|---|---|---|
| Loan amount | $304,000 | $285,000 |
| Estimated principal and interest | $2,126 | $1,993 |
| Taxes and insurance | $450 | $450 |
| Total monthly payment | $2,576 | $2,443 |
| Combined rent | $2,900 | $2,900 |
| DSCR | About 1.13x | About 1.19x |
Kentucky assesses property at fair cash value through the Fayette County PVA. Because the homestead exemption is limited to owners 65 and older or disabled, investor tax bills usually look like the seller's, though a sale can prompt a reassessment. Check the PVA record and the current rate.
Kentucky's deed transfer tax is $0.50 per $500 of value and is customarily paid by the seller. Buyers should plan for title, recording, the appraisal and escrow deposits.
Many duplexes near UK are 80 to 100 years old, and the corridor fourplexes are approaching 60.
Student buildings change hands most smoothly in late spring, when buyers can inspect and line up fall leases. Ask for signed leases for the coming school year, and expect the appraiser to use market rent if units are not yet leased. Family-oriented duplexes in Gardenside or Southland can be bought year-round.
Some Lexington buildings hold five to eight units. They are residential, but leverage can be lower and reviews more detailed; see our Lexington 5-8 unit page. Nine or more units is commercial, covered at /multifamily-loans.html. If you own five or more rentals, a blanket loan can combine them into one payment, qualified on the combined rent of the group, with release provisions for selling one building later.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent for each unit and lease dates through the form below, or call (877) 298-1001. We will run the ratio and show options next to our Kentucky 2-4 unit programs.
Yes. The loan is qualified on the combined rent of both units, with no W-2s or tax returns, and LLC borrowers are standard. The minimum credit score is 620.
The appraiser and lender use rent consistent with legal occupancy. If a unit is leased to more unrelated tenants than zoning allows, that extra rent may not count.
Up to 80% LTV on a purchase and up to 75% on a cash-out refinance, subject to the 1.0x standard minimum DSCR.
Late spring, so you can inspect and have leases in place for the August cycle. Unleased units are usually valued at market rent, and programs differ on how they treat vacancy at purchase.
The seller customarily pays the deed transfer tax of $0.50 per $500 of value, though the contract decides.
Yes, if each unit is legal and permitted. Unpermitted units may not be counted in the appraisal, which lowers the rent used for the DSCR. Ask the seller for permit records and check the zoning before you write an offer.
Yes, up to 75% LTV, with seasoning that varies by program, as long as the new payment clears the ratio on current rents. A refinance after fall leases are signed often shows the strongest rent roll for a student building.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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