Rhode Island's rental stock is old, dense and full of 2-4 unit buildings. That works in an investor's favor, because several rents can carry one payment.
In short: The best DSCR lender in Rhode Island is the one that handles older multi-unit buildings well and sizes the loan on all of the rents. In Providence, Pawtucket and Cranston, triple-deckers and two-families often cash flow better than single-family homes, while Newport and the coast carry high prices and seasonal STR demand. Compare how each lender treats 2-4 units, older property condition, STR income and leverage, along with rate and closing costs. LendingStreet finances investment property in Rhode Island with DSCR rates from 6.125%, up to 80% LTV on purchases and no W-2s or tax returns.
RCN Capital, LendingOne, Visio Lending and Kiavi also write DSCR loans, as does LendingStreet. Programs vary in how they size 2-4 unit buildings, what condition issues they will accept and whether they count projected short-term rental revenue.
In a state where much of the housing was built before World War II, ask early how a lender handles deferred maintenance, older systems and appraisal condition ratings.
We offer DSCR loans that qualify on the property's rent, with 30-year fixed options. For a 2-4 unit building, the rent from every unit counts toward the ratio. Rates start at 6.125% for well-qualified borrowers, and short-term rental DSCR starts at 6.49%.
Purchases go up to 80% LTV and cash-out refinances up to 75%, with a 620 minimum credit score and a standard 1.0x minimum ratio. Some programs go below 1.0 or offer no-ratio options. LLC borrowers are welcome, and loans start at $150,000.
Providence is the state's largest rental market, with demand from Brown University, Rhode Island School of Design, hospitals and state government. Pawtucket and Cranston border Providence and share its stock of triple-deckers and two-families. Warwick, home to the state's main airport, leans more toward single-family homes.
Newport is a seasonal coastal market with summer visitors, historic homes and high prices. Coastal properties across the state may also carry flood zone and wind insurance costs that weigh on the ratio.
Many Rhode Island rentals were built well before 1978, and the state has lead hazard rules for older rental housing. Confirm what certificates or inspections apply with a local attorney or a lead inspector before closing.
Also check heating systems, electrical service, separate utility meters and any open permits. Condition issues can affect the appraisal and the insurance quote, and both feed into the loan.
This example is illustrative and not a quote. An investor buys a three-unit building for $600,000. The units rent for $1,800, $1,700 and $1,650, so total rent is $5,150 a month. Taxes and insurance run $650 a month.
At 80% LTV the loan is $480,000 and the down payment is $120,000. At a sample rate of 7.125% on 30-year amortization, principal and interest is about $3,234, the total payment is about $3,884 and DSCR is about 1.33x. The investor also brings sample closing costs of $11,000.
| Item | Amount |
|---|---|
| Purchase price | $600,000 |
| Loan at 80% LTV | $480,000 |
| Combined rent (3 units) | $5,150 |
| Principal and interest | About $3,234 |
| Taxes and insurance | $650 |
| Total monthly payment | About $3,884 |
| DSCR | About 1.33x |
Newport has registration and zoning rules for short-term rentals, and other coastal towns set their own requirements. The state also requires short-term rental registration. Confirm the current rules with the town before buying a property for nightly use.
Where STRs are allowed, our short-term rental DSCR program qualifies on projected revenue. Because Newport demand is seasonal, expect the revenue projection to reflect the slower months, not just summer.
Send the address, price, leases or rent estimates for each unit, an insurance quote that includes flood coverage if required, and your LLC documents. For a Newport STR, add the town registration and any booking history.
Our financing team reviews your scenario and comes back with 2-3 options. If one unit is vacant or below market, tell us up front, since the appraiser's rent schedule will drive the ratio.
Yes. LendingStreet finances investment property in Rhode Island, including Providence, Warwick, Cranston, Pawtucket and Newport. Loans are business-purpose on non-owner-occupied property and start at $150,000.
It depends on the building. RCN Capital, LendingOne, Visio Lending, Kiavi and LendingStreet all write DSCR loans. Compare how each sizes 2-4 unit properties and handles older housing.
Yes. A three-unit building qualifies as a 2-4 unit property, and the rent from all three units counts toward the ratio.
Not with our loans. LendingStreet finances non-owner-occupied investment property only. An owner-occupied purchase needs a consumer mortgage lender.
Often, yes, where the town allows STR use. Our STR DSCR program qualifies on projected revenue, starting at 6.49%. Confirm registration and zoning rules first.
No. The loan qualifies on the property's rent. You need a 620 or higher credit score, reserves and entity documents if you borrow in an LLC.
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