Anchorage has an unusual number of six- and eight-unit buildings, many built in the late 1970s and early 1980s when the pipeline brought a wave of new residents. They are a staple of local investing and, for financing purposes, still residential.
In short: LendingStreet finances 5-8 unit residential buildings in Anchorage, Eagle River and the Mat-Su with DSCR loans that qualify on the building's combined rent, with no tax returns or W-2s. Loans start at $150,000 with no stated maximum, with a 1.0x standard minimum DSCR and a 620 minimum credit score. Maximum LTV on 5-8 units can be lower than on 1-4 units and varies by program.
Walk through Spenard, Fairview, Mountain View, Midtown, Russian Jack or parts of East Anchorage and you will see two- and three-story wood-frame buildings with six or eight apartments, shared entries and a boiler room. Many were built in the same few years, with similar layouts and systems.
That similarity helps: rents, expenses and repair needs are well understood locally, and appraisers can usually find comparables. It also means many buildings are reaching the age where roofs, boilers, windows and siding need replacing at the same time.
Most of these buildings trade between local investors, often with little marketing. When one comes up, being ready with financing, or a quick bridge loan, can make the difference.
| Area | Typical building | Tenant base |
|---|---|---|
| Spenard, Midtown | 6-8 unit walk-ups | Airport, hospital and office workers |
| Fairview, Mountain View | 8-plexes and fourplex pairs | Working households |
| Russian Jack, East Anchorage | 6-8 unit buildings | Hospital staff, JBER-related tenants |
| Eagle River | Fewer, newer small buildings | Military families, commuters |
This example is illustrative and not a quote. An investor buys a 1980 eight-plex in Spenard for $1,185,000. Each unit rents for $1,325, for $10,600 a month. Property taxes are $1,420 a month and insurance $660. The owner pays about $950 a month in heat for the shared boiler.
At an illustrative 75% LTV the loan is $888,750, estimated principal and interest about $6,214, and the DSCR payment about $8,294 for a DSCR of about 1.28x. At 70% LTV the loan is $829,500 and the DSCR about 1.35x. Heat is not in the DSCR, but after paying it, monthly cash flow at 75% LTV is about $1,356 before vacancy, management and repairs.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan | $888,750 | $829,500 |
| Estimated principal and interest | $6,214 | $5,800 |
| Taxes and insurance | $2,080 | $2,080 |
| DSCR payment | $8,294 | $7,880 |
| Gross rent | $10,600 | $10,600 |
| DSCR | About 1.28x | About 1.35x |
| Owner-paid heat (not in DSCR) | $950 | $950 |
Many Anchorage multiplexes have a single boiler and owner-paid heat, sometimes owner-paid water and sewer as well. Those costs are not part of the DSCR calculation, but they can be the largest operating expense after the mortgage. Ask for 24 months of gas and utility bills, and look at winter months specifically.
An efficient boiler, upgraded windows and better insulation pay off here. Some owners convert to separate heating per unit, which shifts the cost to tenants but requires capital and permits.
When you compare buildings, compare net cash flow after heat and utilities, not just the DSCR. Two buildings with the same rent roll can have very different winter gas bills depending on the boiler, windows and insulation.
Most of these buildings are now 40 to 50 years old. A thorough inspection is worth the cost.
A sewer line camera inspection is also worth considering on older buildings, since cast iron and clay lines can fail and are expensive to replace under a parking lot.
Maximum LTV on 5-8 unit buildings is often lower than on 1-4 units and varies by program and loan size. Reserve requirements can be higher too. Given the big-ticket systems in older Anchorage buildings, carrying solid reserves after closing is smart regardless of what the program requires.
Plan your down payment around a range rather than a single figure, and ask us early what the program limit is for the building you are looking at. Moving from 75% to 70% LTV on a building at this price changes the cash needed by tens of thousands of dollars.
If a building has vacancies, below-market rents or deferred maintenance, a bridge loan to buy and stabilize it, followed by a DSCR refinance, can be the better route. The DSCR refinance then qualifies on the improved rent roll.
Common value-add moves in Anchorage include replacing an old boiler, adding coin or card laundry, improving parking and snow storage and bringing below-market leases up as they renew.
The Municipality assesses property at market value each year, and on a building above $1M the tax bill is one of the largest lines in the payment. Use the actual tax record, and if the price is well above the assessed value, budget for an increase.
Insurance on older wood-frame multiplexes depends on roof age, heating system, wiring and claims history. Carriers in Alaska also look at snow load and frozen pipe exposure. Get a quote before you are under contract, and read the deductibles as well as the premium.
Buildings with nine or more units are commercial property. See our multifamily loan page for those.
If you are comparing an eight-plex with a ten-unit building, the financing paths differ, so ask us about both early in your search.
Send the rent roll, utility history, price and address with the form below, or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. See our Alaska 5-8 unit page for other Alaska markets.
If the building needs work first, we can also review a bridge loan for the purchase and a DSCR refinance once it is stabilized.
For our programs, 1-8 units is residential and can use a DSCR loan. Nine or more units is commercial. The distinction changes the loan program, documents and underwriting.
It varies by program and is often lower than on 1-4 units. Ask us early for the limit on your building.
No. The DSCR uses principal, interest, taxes, insurance and any HOA. Heat affects your actual cash flow, so budget for it carefully.
Yes. Budget for it, or consider a bridge loan to buy and fix it before a DSCR refinance.
No. The loan qualifies on the building's combined rent. LLC borrowers are standard and the minimum credit score is 620.
Rent roll, leases, 24 months of utility bills if owner-paid, insurance quote and the tax bill. A trailing 12-month operating statement also helps.
No. Our investor loans are business-purpose loans on non-owner-occupied property. If you plan to live in one unit, this program is not the right fit.
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