New Mexico's 2-4 unit rentals are mostly stucco duplexes and flat-roofed fourplexes from the 1960s through the 1980s, concentrated in Albuquerque, Las Cruces and Santa Fe. A DSCR loan finances them on combined rent with no tax returns required.
In short: You can finance a New Mexico duplex, triplex or fourplex with a LendingStreet DSCR loan, sized on the building's combined rent. Leverage reaches 80% LTV on a purchase and 75% on a cash-out refinance, the minimum credit score is 620, the standard minimum DSCR is 1.0x and no tax returns are required. In New Mexico, the property tax reset on sale and the condition of flat roofs and cooling systems are the items to price in first.
Albuquerque's growth after World War II produced a large supply of modest duplexes and fourplexes, many of them in neighborhoods near the university, Kirtland Air Force Base and the major hospitals. Prices are moderate by Western standards, so a fourplex can often cover its payment at 80% LTV.
Las Cruces has similar stock around New Mexico State University and draws tenants from White Sands and the region's agricultural economy. Santa Fe is pricier and leans toward converted adobe houses and casitas, where the ratio is tighter. Across the state, investors like the lower purchase prices but have to budget for older roofs and cooling equipment.
Bernalillo and Dona Ana counties hold most of the state's small multifamily. Expect fewer comparable sales elsewhere.
| Area | Typical 2-4 unit stock | What to watch |
|---|---|---|
| Albuquerque, Nob Hill and the University area | Duplexes and fourplexes near UNM and Central Avenue | Student and medical tenants |
| Albuquerque Northeast Heights | 1960s to 1980s fourplexes and duplexes | Flat roofs and evaporative coolers |
| Near Kirtland AFB | Duplexes renting to base and lab staff | Steady demand; check unit condition |
| Las Cruces | Duplexes near NMSU and older central neighborhoods | Lower rents; lower prices |
| Santa Fe | Converted houses, casitas and small multi-unit buildings | High prices; tight coverage |
A DSCR loan ignores your personal income and looks at the building. The combined rent of all units, from leases or the appraisal's rent schedule, is divided by the monthly payment including taxes, insurance and dues. Standard programs want 1.0x or better; sub-1.0 programs are available for some buildings.
Leverage tops out at 80% LTV on a purchase and 75% on a cash-out refinance, with rate-and-term up to 80% on some programs. The minimum credit score is 620, loans start at $150,000, 30-year terms are available and LLC ownership is standard. Our investor loans are business-purpose loans on non-owner-occupied property, so the borrower does not occupy any unit.
New Mexico limits annual increases in the taxable value of residential property, but the limit resets when the property sells. A buyer's bill can therefore jump well above what the seller paid. Ask the county assessor what the value will be after a sale, and do not underwrite on the seller's bill.
New Mexico has no real estate transfer tax, which helps closing costs. It is also a non-disclosure state, so sale prices are not public and appraisers rely on MLS and their own data. Insurance is generally moderate, but flat roofs, older electrical and wildfire exposure in the foothills can affect quotes.
Albuquerque's property tax bill also includes charges for the county, the city, the school district and other entities. Ask the county treasurer for the full bill at the new value.
This example is illustrative and not a quote. An investor buys a fourplex in Albuquerque for $640,000 with 20% down, so the loan is $512,000. The four units rent for $1,250, $1,250, $1,250, $1,250 a month, $5,000 in total. Taxes and insurance run about $590 a month.
On a 30-year amortization, estimated principal and interest is about $3,580, for a total payment of about $4,170. Dividing $5,000 of rent by that payment gives a DSCR of about 1.20x, above the 1.0x standard minimum. The tax figure assumes the bill resets to reflect the purchase price. Using the seller's lower bill would overstate the ratio.
| Item | Amount |
|---|---|
| Purchase price | $640,000 |
| Loan at 80% LTV | $512,000 |
| Down payment | $128,000 |
| Combined rent (4 units) | $5,000 a month |
| Estimated principal and interest | About $3,580 |
| Taxes and insurance | $590 |
| Total monthly payment | About $4,170 |
| DSCR | About 1.20x |
New Mexico's Uniform Owner-Resident Relations Act sets deposit, notice and repair rules statewide, and the state has no rent control. Some cities require a business registration for rental activity, so check with Albuquerque, Las Cruces or Santa Fe before closing.
Cooling is a common repair item. Many older units use evaporative coolers, and tenants increasingly expect refrigerated air. Budget for roof work on flat-roofed buildings, where drainage and membrane age matter, and find out which utilities are separately metered.
In Albuquerque, many fourplexes share one lot with a single water meter, and the owner pays water, sewer and trash. That is common and easy to underwrite, but include it when you estimate your own cash flow.
Each added unit spreads the price and fixed costs across more rent, which usually helps coverage, but it also adds turnover, repairs and management. A duplex is easiest to resell to a wide pool of buyers; a fourplex often has the strongest ratio. Buildings of 5 to 8 units can still use residential DSCR programs, though max LTV varies by program; see our New Mexico 5-8 unit page. Nine or more units is commercial and covered on our multifamily pages.
Many investors buy a tired building with short-term rehab financing, lease the units and then refinance into a long-term DSCR loan. Cash-out tops out at 75% LTV and rate-and-term at up to 80% on some programs, and how long you must own the property before a cash-out varies by program.
Have these ready and you can request terms with confidence.
Usually. The annual limit on residential value increases resets on a sale, so the new bill is based on a current value. Ask the assessor for an estimate.
No. New Mexico does not charge a real estate transfer tax. Title, recording and lender costs still apply.
Some programs allow it, usually with stronger credit or more reserves. Putting more down is the other common fix, since it lowers the payment the rent has to cover.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so every unit must be rented and you cannot occupy any of them. If you plan to live in the building, a consumer mortgage is the right product instead.
If the property is legally two units and both are rented, it can qualify on combined rent. Check zoning and permits for the second unit, since unpermitted casitas can limit options.
Often, because prices are moderate relative to rents. Use a realistic tax estimate after the reset on sale.
Occupied units use their leases, and empty units usually use the appraiser's market rent estimate from the rent schedule. Treatment varies by program, so tell us about any vacancy up front.
No. LLCs are standard, and many investors hold each building in its own entity. Expect to sign for the loan personally as well, and to provide the entity documents.
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