Washington's small multifamily includes older duplexes and triplexes in Spokane, Tacoma and Seattle, student rentals in Bellingham and Pullman, and new middle housing built under the state's 2023 zoning law. A DSCR loan qualifies them on combined rent.
In short: Yes, LendingStreet finances duplexes, triplexes and fourplexes across Washington with DSCR loans that qualify on the combined rent of all units. Purchases go up to 80% LTV and cash-out refinances up to 75%, with a standard 1.0x minimum DSCR, a 620 minimum credit score and no W-2s or tax returns. In Washington, the graduated excise tax, the 2025 rent stabilization law and Seattle's tenant rules are the items to understand first.
Washington passed a 2023 law requiring most cities to allow multiple units on residential lots, with more allowed near transit. That has encouraged new duplexes, triplexes and fourplexes, especially in the Puget Sound region.
Seattle and the Eastside are expensive enough that coverage at 80% LTV is difficult. Tacoma, Everett, Spokane, Yakima and the Tri-Cities offer better rent-to-price ratios. Spokane in particular has older duplexes and triplexes near Gonzaga and on the South Hill at prices that can cover a DSCR payment.
Spokane draws investors priced out of the west side, with duplexes and triplexes near Gonzaga, on the South Hill and in older neighborhoods north of downtown. Fairchild Air Force Base and the region's health systems add steady demand, and prices sit well below Puget Sound levels.
The Puget Sound and Spokane regions hold most of the state's small multifamily.
| Area | Typical 2-4 unit stock | What to watch |
|---|---|---|
| Seattle | Older duplexes and new middle housing | Strict tenant rules; high prices |
| Tacoma | Older duplexes and triplexes in the Hilltop and South End | Moderate prices for the region |
| Spokane | Duplexes and triplexes near Gonzaga and the South Hill | Lower prices; solid demand |
| Bellingham | Student rentals near Western Washington University | Tight market |
| Tri-Cities and Yakima | Duplexes serving agriculture and energy employers | Lower prices; fewer sales |
The loan qualifies on the debt service coverage ratio: the combined monthly rent of every unit divided by the full monthly payment, including principal, interest, taxes, insurance and any association dues. The standard minimum is 1.0x, and sub-1.0 programs exist for buildings that fall a little short.
Purchases go up to 80% LTV, cash-out refinances up to 75% and rate-and-term refinances up to 80% on some programs. Loans start at $150,000 with no stated maximum, 30-year terms are available, the minimum credit score is 620 and no W-2s or tax returns are needed. LLC borrowers are standard. Our investor loans are business-purpose loans on non-owner-occupied property, so every unit is a rental.
Washington charges a real estate excise tax on sales with graduated brackets, so higher-priced properties pay more on the top portion of the price. The seller customarily pays it. There is no separate mortgage tax.
County assessors revalue property annually. Washington has no state income tax, so property and sales taxes carry more of the load. Use the current bill for the address. Earthquake coverage in western Washington is usually optional but worth pricing.
Washington's property tax system limits how much each taxing district's total levy can grow each year, but an individual property's bill can still rise faster when its value climbs relative to its neighbors.
This example is illustrative and not a quote. An investor buys a triplex in Spokane for $600,000 with 20% down, so the loan is $480,000. The three units rent for $1,500, $1,500, $1,500 a month, $4,500 in total. Taxes and insurance run about $600 a month.
On a 30-year amortization, estimated principal and interest is about $3,356, for a total payment of about $3,956. Dividing $4,500 of rent by that payment gives a DSCR of about 1.14x, above the 1.0x standard minimum. Spokane's prices let this triplex clear the minimum at 80% LTV. A Seattle triplex with higher rents but a much higher price would usually need a larger down payment.
| Item | Amount |
|---|---|
| Purchase price | $600,000 |
| Loan at 80% LTV | $480,000 |
| Down payment | $120,000 |
| Combined rent (3 units) | $4,500 a month |
| Estimated principal and interest | About $3,356 |
| Taxes and insurance | $600 |
| Total monthly payment | About $3,956 |
| DSCR | About 1.14x |
A 2025 state law caps annual rent increases for many residential units, with the cap tied to inflation and a maximum set by statute, and exemptions for newer buildings. Washington also requires longer notice before rent increases than many states.
Seattle adds a Rental Registration and Inspection Ordinance, just-cause eviction rules and a winter eviction restriction. Tacoma and Spokane have their own requirements. Read the current rules for your city before you underwrite rent growth.
Seattle and Tacoma also require landlords to give tenants specific notices and disclosures at lease signing and before rent increases. A local property manager familiar with the rules is worth the fee for an out-of-area owner.
A two-unit building is the simplest to buy, insure and sell. Three and four units usually improve the ratio because one roof, one tax bill and one insurance policy cover more rent. Beyond four units, residential DSCR programs still reach 8 units, with max LTV that varies by program, and our Washington 5-8 unit page covers those buildings. At 9 units and up the loan becomes commercial.
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.
Gathering these early keeps the appraisal and underwriting moving.
The loan is qualified on current rent, so the cap does not change approval. It does limit how quickly rents can grow.
It is customarily paid by the seller, with graduated brackets on higher prices.
Purchases go up to 80% LTV, so at least 20% down, with loans from $150,000. A low DSCR or high taxes can require more, and you will also need funds for closing costs and reserves.
No. DSCR loans qualify on the property's rent, with no W-2s, pay stubs or tax returns. Credit, reserves and the property itself are what underwriting reviews.
Yes, if it is complete, legally three units and rentable. A construction loan funds the build itself.
Yes. It qualifies on combined rent. Spokane's prices often let triplexes cover the payment at 80% LTV.
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.
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