Texas has small multifamily in every major metro: fourplexes in Arlington, Garland and Oak Cliff, duplexes near UT Austin and in Houston's older neighborhoods, and older stock in San Antonio and El Paso. A DSCR loan qualifies them on combined rent, but property taxes decide most Texas files.
In short: You can finance a Texas 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 Texas, the property tax bill and hail insurance are the two lines that most often decide whether the combined rent clears the minimum.
Texas has added people faster than almost any state, and rental demand runs deep in Dallas-Fort Worth, Houston, San Antonio and Austin. Small multifamily serves workers across energy, health care, logistics and tech.
Texas has no state income tax, so local property taxes fund schools and local government, and bills are high relative to value. On a fourplex, the tax line can rival principal and interest. Austin's 2023 HOME initiative allows up to three units on many single-family lots, adding new supply there.
Dallas-Fort Worth offers the widest choice, with older fourplexes in Arlington, Garland, Irving and Oak Cliff, and newer duplexes in suburbs such as Burleson and Mansfield to the south. Houston's inner neighborhoods and San Antonio's older central areas have duplex stock at lower prices than Austin.
Every major Texas metro has small multifamily, but taxes and prices vary.
| Area | Typical 2-4 unit stock | What to watch |
|---|---|---|
| Dallas-Fort Worth | Fourplexes in Arlington, Garland, Oak Cliff and Fort Worth | High taxes; hail |
| Houston | Duplexes in older inner-loop and near-suburb neighborhoods | Flood zones; wind coverage |
| San Antonio | Fourplexes and duplexes in older central areas | Moderate prices; high taxes |
| Austin | Duplexes near UT and new HOME-initiative units | High prices; tight coverage |
| El Paso | Older duplexes and fourplexes | Lower prices; steady military demand |
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.
Texas appraisal districts value property every year, and owners can protest. In 2023 the state enacted a temporary 20% cap on annual appraisal increases for non-homestead property valued at $5 million or less, scheduled to run through 2026 unless extended. The cap applies after the first year you own the property, so use a realistic tax estimate based on your price.
Texas has no transfer tax or mortgage tax. Insurance is shaped by hail across North and Central Texas and wind and flood along the coast. Get a current quote on the address.
Texas protests are a normal part of ownership. Many investors file a protest every year, either themselves or through a tax consultant, and a lower appraised value directly improves the DSCR on a refinance.
This example is illustrative and not a quote. An investor buys a fourplex in San Antonio for $600,000 with 20% down, so the loan is $480,000. The four units rent for $1,300, $1,300, $1,300, $1,300 a month, $5,200 in total. Taxes and insurance run about $1,360 a month.
On a 30-year amortization, estimated principal and interest is about $3,356, for a total payment of about $4,716. Dividing $5,200 of rent by that payment gives a DSCR of about 1.10x, above the 1.0x standard minimum. Taxes are the largest non-loan cost. If the appraisal district values the property above your price, the bill could rise further.
| Item | Amount |
|---|---|
| Purchase price | $600,000 |
| Loan at 80% LTV | $480,000 |
| Down payment | $120,000 |
| Combined rent (4 units) | $5,200 a month |
| Estimated principal and interest | About $3,356 |
| Taxes and insurance | $1,360 |
| Total monthly payment | About $4,716 |
| DSCR | About 1.10x |
Texas Property Code sets deposit, repair and notice rules statewide, and the state prohibits local rent control. Some cities, including Dallas, require rental registration and inspections for certain properties.
Check whether the property is in a flood zone, especially in Houston, and whether units have separate meters.
In Houston, review the flood history and the elevation of the specific address, not only the flood map. Many inner-loop duplexes have flooded in past storms, and that history affects insurance and resale.
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 Texas 5-8 unit page. Nine or more units is commercial and covered on our multifamily pages.
A 2-4 unit you already own can be refinanced on its rent, either to lower the payment structure or to take cash out for the next purchase. Cash-out goes up to 75% LTV, rate-and-term up to 80% on some programs, and seasoning requirements for cash-out vary by program.
Have these ready and you can request terms with confidence.
Because taxes are in the monthly payment and Texas bills are high. A fourplex's tax line can rival principal and interest.
A temporary 20% cap on non-homestead property valued at $5 million or less was enacted in 2023 and runs through 2026 unless extended. Confirm current law.
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.
Yes, if it is complete, legally three units and rentable.
Yes. Owners can protest each year through the appraisal district. A lower value lowers the tax line in the payment.
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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