In Michigan, the number that most often surprises a 5-8 unit buyer is not the rate or the rent. It is the tax bill after the sale uncaps the building's taxable value.
In short: Our top pick for 5-8 unit rentals in Michigan is LendingStreet. We underwrite five- to eight-unit buildings as residential DSCR loans on the combined rent of every unit, with no W-2s or tax returns, LLC borrowing as standard and 30-year terms available. Loans start at $150,000 with no stated maximum. We run the ratio on a realistic post-purchase tax bill, because Michigan's uncapping rules and non-homestead millage can raise taxes sharply after a sale, and we check local rental certification requirements early.
Michigan's older cities were built with small apartment buildings on almost every main street: brick walk-ups in Detroit's Midtown and Woodbridge, converted mansions in Grand Rapids's Heritage Hill, and student buildings near campuses in Ann Arbor, East Lansing and Kalamazoo. Many lenders treat a five- to eight-unit building as commercial, with shorter terms and more paperwork.
LendingStreet keeps 5-8 unit buildings in our residential DSCR program. You qualify on the rent of every legal unit, with no W-2s or tax returns, a 620 minimum credit score and LLC borrowing as standard. Loans start at $150,000 with no stated maximum, 30-year terms are available, and the standard minimum DSCR is 1.0x, with sub-1.0 programs on some files. Max LTV on 5-8 units varies by program.
To see where your building lands, get a quote with the form below or call (877) 298-1001.
If you are weighing CoreVest, Dominion Financial, LendingOne, Lima One, New Silver and RCN Capital for a 5-8 unit rental loan for investors in Michigan, this is the short version: LendingStreet wins the scenarios below, and you can get a quote with the form below.
Figures for other lenders are as stated on each lender's own website as of November 2026. Lender terms change, so verify current terms with any lender before you apply. Ready to see your numbers? Use the form below or call (877) 298-1001.
| Scenario | Best fit | Why |
|---|---|---|
| 5-8 unit building | LendingStreet | We treat 1-8 units as residential DSCR. Lima One and CoreVest state 1-4 unit eligibility for their rental loans. |
| Rental loan above $2M | LendingStreet | Our DSCR loans have no stated maximum. LendingOne states DSCR loans up to $2,000,000 and RCN Capital states long-term rental loans up to $1.5M. |
| Credit score in the 620s | LendingStreet | Our DSCR minimum is 620. RCN Capital and New Silver state 660 minimums, and Dominion Financial states 680, with exceptions to 660. |
| Property in any state, including DC | LendingStreet | We lend in all 50 states and DC. Lima One states it lends across 46 states, and Dominion Financial lists 49 states plus DC. |
The table gives the general picture. Every lender is different, and a bank or private lender can be the right fit for some borrowers and projects.
| What you need | LendingStreet | Typical local bank | Typical hard money lender |
|---|---|---|---|
| 5-8 unit loan type | Residential DSCR | Often commercial | Short-term loan |
| Documentation | Rent of every unit; no tax returns | Often tax returns and personal financials | Deal-focused |
| Hold period | 30-year terms available | Shorter terms with balloons are common | Usually under two years |
| LLC borrowing | Standard | Common | Common |
| Geography | All 50 states and DC | Usually local | Usually local |
| Leverage | Varies by program | Varies by bank | Fees and terms vary |
Under Proposal A, a property's taxable value can rise each year only by inflation or 5%, whichever is less, until it sells. When it transfers, taxable value uncaps the following year and resets to the state equalized value, which is generally about half of market value. On a building a seller has held for many years, the new owner's bill can be far higher than the seller's.
Investors also pay the non-homestead school operating millage of up to 18 mills, which owner-occupants with a principal residence exemption avoid. Use a tax estimate based on your purchase price and the non-homestead rate, not the seller's current bill.
Michigan also charges state and county real estate transfer taxes at closing, customarily paid by the seller.
This example is illustrative and not a quote. An investor buys an eight-unit brick building in Grand Rapids for $1,150,000. Units rent for $1,325 each, for $10,600 a month. Insurance is $700 a month. The seller's tax bill works out to $1,100 a month, but after the purchase uncaps taxable value and drops any exemption, taxes are estimated at $2,150.
At 75% LTV the loan is $862,500, with estimated principal and interest of about $5,884. On the seller's tax bill, the payment would be about $7,684 and DSCR about 1.38x. On the realistic tax figure, the payment is about $8,734 and DSCR is about 1.21x. The building still clears 1.0x, but the cushion shrinks, which matters if a unit turns over or insurance rises.
| Item | Seller's tax bill | Uncapped investor tax bill |
|---|---|---|
| Loan at 75% LTV | $862,500 | $862,500 |
| Estimated principal and interest | $5,884 | $5,884 |
| Property taxes | $1,100 | $2,150 |
| Insurance | $700 | $700 |
| Total monthly payment | $7,684 | $8,734 |
| DSCR at $10,600 rent | About 1.38x | About 1.21x |
Detroit requires rental properties to be registered and to pass inspection for a certificate of compliance, including lead requirements for older housing. Grand Rapids, Lansing, Ann Arbor, Kalamazoo and many other cities run their own rental certification or inspection programs. Requirements and timelines vary, so check with the city before you close.
A building without a current certificate can still be financed in many cases, but you should know the cost and time to bring it into compliance before you set your price.
In metro Detroit, buyers look at Midtown, Woodbridge, Corktown and the blocks near Detroit's hospital district, as well as inner-ring suburbs like Ferndale, Royal Oak, Hamtramck and Dearborn. Grand Rapids investors focus on Heritage Hill, Eastown and the near west side.
College towns create their own demand. Ann Arbor has small buildings near the University of Michigan, East Lansing near Michigan State, Kalamazoo near Western Michigan, and Mount Pleasant near Central Michigan. Many are rented by the bedroom, so bring leases that show the full building rent.
Smaller cities such as Flint, Saginaw, Muskegon and Battle Creek offer older buildings at low prices per unit. Ratios can look strong on paper, but check condition, vacancy history and the local rental program closely, since repair and compliance costs can be large relative to the purchase price.
Compare lenders on the same questions so the answers line up. Here is how LendingStreet answers.
Send the address, price, rent roll, an estimated post-sale tax bill, an insurance quote, the rental certificate status and your LLC documents, along with the loan amount you want. We will run the ratio at more than one leverage level. Buildings with 9 or more units are commercial; see our commercial page. Get a quote with the form below or call (877) 298-1001.
Our top pick is LendingStreet. We treat five- to eight-unit buildings as residential DSCR loans, qualify on rent with no tax returns, lend to LLCs and offer 30-year terms.
Yes. We lend across Michigan, including Detroit and its suburbs, Grand Rapids, Lansing, Ann Arbor, Kalamazoo and Traverse City, and in all 50 states and DC.
Michigan uncaps taxable value when a property transfers, and investors pay the non-homestead school millage. Estimate taxes on your purchase price.
Not always, but Detroit requires registration and a certificate of compliance for rentals. Know the cost and timeline to comply before you close.
State and county transfer taxes are customarily paid by the seller, though the purchase contract controls.
Often, yes, if the units are legal and the rent is supported by leases or a market rent estimate.
Yes, if the rent covers the new payment. Seasoning and max LTV vary by program.
Buildings with 9 or more units are commercial loans, which have separate rules.
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