Five to nine units is a strange size. It is too big for a residential rental loan and often too small for the large apartment lenders. Here is who finances it and how.
In short: LendingStreet finances 5–9 unit investment properties with loans underwritten on the building’s net operating income (NOI), not on your personal income. Programs start around $150K, allow LLC ownership and are available in all 50 states. Properties with 2–4 units fall under residential DSCR rules instead, so crossing to five units changes how the deal is measured.
Residential rental programs stop at four units. Large multifamily programs often prefer loans well above $1 million and buildings with dozens of units. A 6-unit or 8-unit building sits between the two.
Local banks will sometimes lend, but they usually want tax returns, personal income and a deposit relationship. That is a lot of paper for an investor who owns property in an LLC and wants the building to qualify on its own numbers.
Investment property financing companies like LendingStreet fill this gap. We finance small multifamily as business-purpose loans, sized on the property’s income and value.
Our programs include 30-year fixed options, interest-only periods on some structures and bridge loans for buildings that need work before they stabilize. Experience owning rentals helps, but first-time apartment buyers are not automatically excluded.
The underwriter builds an operating statement for the building. Rent comes from the rent roll and leases. Vacancy and expenses come from the property’s history or market standards, whichever is more conservative.
The resulting NOI is divided by annual debt service. Minimum coverage requirements vary by program. Many NOI-based programs look for more cushion than the 1.0x floor used on standard residential DSCR loans.
This is an illustrative example, not a quote. An investor buys a 7-unit building for $1,050,000. Each unit rents for $1,350 a month.
At 75% of price, the loan is $787,500. At an illustrative 6.5% rate on 30-year amortization, annual debt service is about $59,730. That gives coverage of roughly 1.13x.
| Line | Annual amount |
|---|---|
| Gross rent (7 × $1,350 × 12) | $113,400 |
| Less 5% vacancy | −$5,670 |
| Less operating expenses | −$40,000 |
| Net operating income | $67,730 |
| Debt service on $787,500 | $59,730 |
| Coverage ratio | ≈1.13x |
In the example, 1.13x clears a 1.0x floor but may miss a program that wants more cushion. There are three common fixes.
You can put more money down, which lowers debt service. You can show that expenses are lower than the underwriter assumed, with real bills. Or you can use a short-term bridge loan while you raise rents, then refinance into permanent debt once NOI improves.
Two buildings with the same price can get very different terms. Underwriters look closely at the details that drive risk on a small property, where one vacancy is a big share of income.
Send the address, price, rent roll and expense figures. Your loan officer will run the numbers the way an underwriter will, before you spend money on an appraisal.
Our financing team typically returns 2–3 options with different leverage, terms and cash to close, so you can compare them on one page.
For financing purposes, five or more units is treated as multifamily, which most programs handle as commercial. That means underwriting shifts to the building’s NOI. Properties with 2–4 units stay under residential DSCR rules.
It depends on the program and the building’s cash flow. Many purchases land around 20–30% down. Weaker coverage ratios usually require more cash in.
Not on our NOI-based programs. The building qualifies on its income and value. You still provide a credit report, bank statements for reserves and property documents.
Yes, 30-year amortization is common on small multifamily, and some programs offer 30-year fixed terms. Others use a shorter fixed period with 30-year amortization. Your loan officer will show the trade-offs.
Some programs allow it, using projected or actual short-term revenue. Requirements are stricter than for long-term leases. See our 5–8 unit short-term rental page for details.
Timing depends on the appraisal, title and how quickly documents come in. Small multifamily permanent loans commonly take several weeks. A complete file at the start is the biggest thing you can do to shorten it.
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Properties with 5+ units are commercial by definition, so they fall outside Fannie/Freddie residential programs. But at 5-20 units the loan is usually too small for institutional multifamily desks, whose minimums and timelines are built for 50+ unit assets. The result is a financing gap: too big for residential, too small for institutional.
Through DSCR-based and bridge capital sources that underwrite to the property's net operating income rather than agency checklists. Typical structures: purchase or refinance at up to 75% LTV, 5-20 units, $200K-$20M, with bridge-to-perm available for value-add and lease-up plays.
Stabilized small multifamily DSCR loans typically close in 14-21 days. Bridge structures for value-add acquisitions can close in 5-10 days, then refinance into permanent DSCR financing after stabilization.
No. These programs underwrite the property's income (NOI / DSCR), not your tax returns. LLC borrowers are standard, and there is no W2 requirement.
Mixed-use with a residential majority (for example, apartments over retail) can be placed through commercial and mixed-use capital sources through the same LendingStreet application, with custom terms up to $5M+.