Small multifamily in the Little Rock area ranges from century-old Hillcrest homes split into apartments to plain brick fourplexes built in rows near Little Rock Air Force Base in Jacksonville. Both rent steadily, and both can be financed on rent alone with a DSCR loan.
In short: LendingStreet offers DSCR loans for 2 to 4 unit rentals in Little Rock and the surrounding cities, qualified on the combined rent of every unit 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 and LLC borrowers are standard. Moderate Arkansas property taxes help many central Arkansas fourplexes clear the 1.0x minimum.
In Hillcrest, the Heights, Stifft Station, Capitol View and the Quapaw Quarter, many older homes were divided into two to four apartments, often close to UAMS, Arkansas Children's and downtown. They have character and strong demand from medical staff and young professionals, along with older plumbing and wiring.
Farther out, the stock is more practical. Jacksonville, Sherwood, Cabot and parts of North Little Rock have purpose-built duplexes and fourplexes, many from the 1970s and 1980s, rented to families and military personnel. Conway, home to the University of Central Arkansas and Hendrix College, has its own supply of student-oriented duplexes.
Prices reflect that split. Central conversions near the medical district usually cost more per unit and carry more repair risk, while base-area fourplexes cost less per unit and lean on steady demand from Air Force families. Many local investors own one of each.
Little Rock's zoning code separates single-family, two-family and multifamily districts, and some older central neighborhoods have historic district rules on exterior changes. A converted house may be a legal triplex, a legal nonconforming use, or a single-family home with unpermitted apartments. Only legal units count toward rent.
Check the zoning district and permit history with the City of Little Rock Planning and Development Department and compare the Pulaski County Assessor's description with the listing. In Jacksonville, Sherwood or North Little Rock, check with that city instead.
This example is illustrative and not a quote. The table compares a 1980s fourplex in Jacksonville near the Air Force base with a converted triplex in Hillcrest, each financed at 75% LTV on a 30-year term. Taxes are budgeted at about 0.7% of value a year, reflecting Arkansas's 20% assessment ratio and typical millage.
The fourplex costs less and rents for less per unit, but four rents against one payment produce a DSCR of about 1.38x. The Hillcrest triplex has higher rents and a higher price, and its DSCR is about 1.21x. Both clear the 1.0x minimum, but the fourplex leaves more room for vacancy as military families move.
| Item | Jacksonville fourplex | Hillcrest triplex |
|---|---|---|
| Purchase price | $380,000 | $450,000 |
| Monthly rent | 4 x $850 = $3,400 | 3 x $1,150 = $3,450 |
| Loan at 75% LTV | $285,000 | $337,500 |
| Estimated principal and interest | $1,993 | $2,360 |
| Taxes (monthly) | $222 | $262 |
| Insurance (monthly) | $250 | $225 |
| Total monthly payment | $2,464 | $2,847 |
| DSCR | 1.38x | 1.21x |
Near the medical district, tenants include residents, nurses and hospital staff, and units close to UAMS rent quickly. Near Little Rock Air Force Base, tenants are often military families and civilian contractors, with moves tied to assignments. In Conway, many duplexes rent to students on school-year leases.
The lender uses the lower of actual lease rent and the appraiser's market rent for each unit, so a unit leased far below market is counted at its lease rent until it turns over.
Arkansas assesses property at a 20% assessment ratio, and homestead credits only apply to a primary residence, so check the full non-homestead bill with the Pulaski County Collector. Arkansas also charges a real property transfer tax when you buy.
On older conversions, landlords often pay water and sometimes gas because the units share meters. Purpose-built fourplexes more often have separate electric meters. Ask for a year of utility bills before you close.
Severe storms, hail and tornadoes affect insurance pricing across central Arkansas. A 1980s fourplex with an older roof or original panels can cost more to insure, and some carriers will not write older electrical systems. Get a quote before you finalize your offer.
Check flood maps for properties near the Arkansas River, Fourche Creek and low areas of North Little Rock. Flood insurance adds to the payment and lowers the ratio.
For 5 to 8 unit buildings, see /dscr-loans-5-8-units-little-rock-ar.html. Those are still residential for our programs, though max LTV can be lower. If you own several small multifamily buildings, a blanket loan may combine them; see /blanket-portfolio-loans-little-rock-ar.html.
If the building is vacant or needs a full renovation, a bridge or fix and flip loan can come first, followed by a DSCR refinance once units are leased.
Send the address, price or value, unit mix, current rents and any tax and insurance figures through the form below, or call (877) 298-1001. We will run the combined rent against the payment and tell you what leverage works.
If you are buying, include the seller's rent roll and copies of current leases, and note any units that are month to month. If you are refinancing, add your current loan balance and a list of recent work, such as a new roof, HVAC units or separate meters. Those details help the appraiser and can lower your insurance quote, and both affect the final ratio.
Yes. A DSCR loan uses the building's combined rent to qualify, not your personal income.
Yes. Leases to service members count like any other. Many include a military clause allowing early termination for orders, which is normal near the base.
Usually not. Only legal units count toward rent. Check zoning and permit records before you buy.
Purchases go up to 80% LTV on some programs. Leverage can be lower on some files and varies by program.
They are moderate compared with many states, because Arkansas uses a 20% assessment ratio. Rentals do not get homestead credits, so check the full bill.
Yes. Cash-out goes up to 75% LTV, and seasoning varies by program.
Timing depends mostly on the appraisal, title work and insurance. Small multifamily appraisals can take longer than single-family ones because there are fewer comparable sales, so order it early and have leases ready.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so you do not live in any of the units.
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