Louisville's small multifamily stock is unusually distinctive. There are double shotgun houses in Germantown and Schnitzelburg, Victorian mansions in Old Louisville divided into three or four apartments, and brick fourplexes along streets in Crescent Hill, Clifton and the Highlands. Each type rents well, and each comes with its own questions.
In short: LendingStreet offers DSCR loans for 2 to 4 unit rentals in Louisville, 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 the standard minimum DSCR is 1.0x. Moderate Kentucky property taxes help many Louisville duplexes and fourplexes clear that minimum.
Double shotguns, long narrow houses split down the middle with a unit on each side, are common in Germantown, Schnitzelburg, Portland, Butchertown and the Highlands. Camelbacks add a second story at the rear. Many were built as two-family homes, and their prices make them a common first rental for local investors.
Old Louisville, one of the largest Victorian neighborhoods in the country, has grand homes divided into apartments, often three to six units. Crescent Hill, Clifton, the Highlands and St. Matthews have purpose-built brick duplexes and fourplexes from the early and mid-1900s. South and southwest Louisville have newer duplexes from later decades.
Louisville Metro's Land Development Code uses both zoning districts and form districts, which shape what can be built and how. A two-family or multi-family use has to be allowed by the zoning, and a converted house may be a legal nonconforming use. Only legal units count toward rent for the loan.
Old Louisville, Butchertown, Clifton and several other neighborhoods are local preservation districts, where exterior changes need review by Louisville Metro's landmarks staff. That does not block a purchase, but it affects renovation plans and costs.
If a building has more units than its permits show, price it on the legal count and treat any path to legalizing the extra unit as upside, not as part of the loan.
This example is illustrative and not a quote. The table compares a converted Victorian fourplex in Old Louisville with a double shotgun duplex in Schnitzelburg. Property taxes are budgeted at about 1% of value a year in both cases.
The Old Louisville fourplex at 75% LTV produces a DSCR of about 1.21x, helped by four rents against one payment, though insurance is higher on a large older building. The Schnitzelburg duplex at 80% LTV comes in at about 1.21x. Both clear the 1.0x minimum.
| Item | Old Louisville fourplex | Schnitzelburg duplex |
|---|---|---|
| Purchase price | $520,000 | $260,000 |
| Monthly rent | 4 x $1,050 = $4,200 | 2 x $1,100 = $2,200 |
| LTV | 75% | 80% |
| Loan amount | $390,000 | $208,000 |
| Estimated principal and interest | $2,727 | $1,454 |
| Property tax (monthly) | $433 | $217 |
| Insurance (monthly) | $325 | $150 |
| Total monthly payment | $3,485 | $1,821 |
| DSCR | 1.21x | 1.21x |
Near downtown and the medical center, tenants include hospital staff, students at the University of Louisville and young professionals. Old Louisville units rent to UofL students and staff. The Highlands and Crescent Hill draw tenants who want walkable streets and restaurants. South Louisville duplexes rent to families and workers at the UPS Worldport hub and industrial employers nearby.
The lender uses the lower of current lease rent and market rent for each unit, and vacant units are usually counted at market on a purchase.
Kentucky assesses property at fair cash value through the Jefferson County Property Valuation Administrator, and rentals do not get the homestead exemption. A deed transfer tax applies at purchase. Check the full current bill and expect the assessment to move toward your price.
Older doubles and Victorian conversions often share water service, and some share heat. Ask for a year of utility bills. Knob-and-tube wiring, old boilers and slate or older roofs can affect both insurance and inspections, so get an inspection and insurance quote early.
Parts of Portland, the West End, Butchertown and southwest Louisville sit in or near flood zones along the Ohio River and its creeks. Flood insurance raises the payment and lowers the ratio. Check FEMA flood maps for every address.
Large Victorian buildings in Old Louisville can cost more to insure because of their size and age, which is why the fourplex example above carries a higher insurance figure.
Many Old Louisville mansions hold five to eight units, which moves them into the 5-8 unit program. Those are still residential for our programs, though max LTV can be lower. See /dscr-loans-5-8-units-louisville-ky.html. Buildings of 9 or more units are commercial.
If you own several small multifamily buildings, a blanket loan may combine them; see /blanket-portfolio-loans-louisville-ky.html.
Send the address, unit count, rents, lease dates 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 the building supports.
Germantown and Schnitzelburg doubles are the most common first purchase, with prices that keep loan sizes modest and steady demand from young workers. Portland and the West End have lower prices and more renovation needs; check flood maps and code history carefully there. The Highlands and Crescent Hill command higher rents and prices, and units there turn over less often.
Old Louisville sits in its own category: large buildings, strong rents near UofL and higher insurance and maintenance costs. In south Louisville, newer duplexes near Okolona and Fern Creek trade at moderate prices and often have separate utilities, which keeps operating costs predictable.
Whichever area you choose, walk the block, check recent sales of similar buildings and talk to a local property manager about realistic rents before you lock in a price.
Yes. A double shotgun is a duplex, and the loan qualifies on the combined rent of both sides.
No. A DSCR loan uses the property's rent, not your personal income.
Only if it is a legal unit under zoning and permit records. Unpermitted units usually do not count.
Not directly, but exterior work needs review, which can affect renovation timing and costs.
Purchases go up to 80% LTV on some programs. Leverage can be lower on some files and varies by program.
Yes. Cash-out goes up to 75% LTV, and seasoning varies by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Check the FEMA flood map for the address and ask your insurance agent for a quote. Parts of Portland, the West End and areas near the Ohio River and its creeks are mapped flood zones.
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