Baltimore's five to eight unit buildings are mostly grand rowhouses divided into apartments, in neighborhoods like Mount Vernon, Bolton Hill and Charles Village. Prices per unit can be attractive, but the city's tax rate, licensing and lead rules are among the strictest in the region.
In short: LendingStreet finances 5 to 8 unit rental buildings in Baltimore with DSCR loans that qualify on the building's rent, not your income. LLC borrowers are standard, loans start at $150,000 with no stated maximum and the standard minimum DSCR is 1.0x. In Baltimore, the city property tax rate, rental licensing, Maryland lead registration and ground rent are the items to check first.
Mount Vernon and Bolton Hill have 19th century rowhouses, many four or five stories tall, that were divided into five or more apartments long ago. Charles Village and Remington have large rowhouses near Johns Hopkins' Homewood campus. Canton, Federal Hill and Butchers Hill have smaller rowhouses but also corner buildings with several units.
Renters include students and staff at Johns Hopkins, the University of Maryland Baltimore and MICA, hospital workers and commuters to Washington along the MARC line.
Some blocks have strong demand while nearby blocks have vacant houses, so the street matters as much as the neighborhood.
| Area | Typical 5-8 unit stock | What to check |
|---|---|---|
| Mount Vernon, Bolton Hill | Tall rowhouses divided into apartments | Historic district rules, fire code |
| Charles Village, Remington | Large rowhouse conversions | Student leases, parking |
| Canton, Federal Hill, Butchers Hill | Corner buildings, rowhouses | Flood zone near the harbor |
| Hampden, Highlandtown | Rowhouses and small buildings | Unit count, block conditions |
A DSCR loan on a five to eight unit building qualifies on the building's rent, not your income. We add up the leases or market rents for every unit and divide by the full monthly payment: principal, interest, property 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.
We treat 1 to 8 units as residential, so a six-family is underwritten as a rental, not as a commercial deal. Purchases go up to 80% LTV on some programs, but maximum leverage on 5-8 units is often lower and varies by program and loan size. Cash-out refinances go up to 75% LTV. Loans start at $150,000 with no stated maximum, 30-year terms are available and the minimum credit score is 620. Buildings with nine or more units move to our multifamily program.
Rents vary a lot block to block in Baltimore. We use the leases in place and an appraiser's market rent estimate, so a rent roll backed by comparable leases nearby gets a cleaner review.
Baltimore City has the highest property tax rate in Maryland, and the homestead tax credit only applies to owner-occupants. On a rental, taxes take a larger share of the rent than in the surrounding counties. Budget on the current assessment at the full city rate.
Maryland's state transfer tax plus Baltimore City's transfer and recordation taxes make city closing costs among the higher in the state. Who pays what depends on the contract and local custom, so ask your title company for an estimate early.
Baltimore City requires a rental license for every rental property, which includes an inspection by a licensed home inspector. Without a current license, landlords can face fines and limits on collecting rent through the courts.
Maryland requires owners of rentals built before 1978 to register them with the Department of the Environment and meet lead risk reduction standards at each turnover. Ask the seller for registration and inspection certificates.
Baltimore has an old system of ground rent, where some properties sit on land that carries an annual ground rent owed to a separate owner. Your title search should show it. Ground rents are usually small, but they must be paid and handled correctly at closing. Maryland does not have statewide rent control.
This example is illustrative and not a quote. An investor buys a 6-unit rowhouse in Mount Vernon for $780,000. The units rent for about $1,250 each, or $7,500 a month. Taxes are budgeted at $1,460 a month at the full city rate and insurance at $550.
At 75% LTV, the loan is $585,000. On a 30-year fixed, principal and interest is about $4,090, the full payment with taxes and insurance is about $6,100, and DSCR is about 1.23x. At 70% LTV, the loan is $546,000, principal and interest is about $3,818, the payment is about $5,828 and DSCR is about 1.29x.
Both loans clear 1.0x. Taxes here take nearly a fifth of the rent, which is the Baltimore City rate at work. The 70% loan needs about $39,000 more at closing.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Gross monthly rent | $7,500 | $7,500 |
| Loan amount | $585,000 | $546,000 |
| Principal and interest | $4,090 | $3,818 |
| Property taxes | $1,460 | $1,460 |
| Insurance | $550 | $550 |
| Total monthly payment | $6,100 | $5,828 |
| DSCR | About 1.23x | About 1.29x |
Divided rowhouses often have tall, narrow stairways, so fire code rules for multi-unit buildings matter. Roofs, rear walls and masonry on 100-plus-year-old buildings need a close look, and harbor-side blocks can fall in flood zones.
A complete package gets a faster and clearer answer. Most 5-8 unit files need the following.
Our investor loans are business-purpose loans on non-owner-occupied property. We finance DSCR loans on 5-8 unit rentals across Baltimore City and Baltimore County.
Send the address, price, rent roll and target leverage through the form below, or call (877) 298-1001. We run the ratio on a realistic tax and insurance figure at a few loan amounts and come back with options. If the building needs work before it can qualify on rent, a bridge loan first and a DSCR refinance after is a common path.
Yes. Baltimore City requires a rental license, with an inspection, for every rental property. Plan for it right after closing if the seller's license will not carry over.
An annual fee owed to a separate owner of the land under some Baltimore properties. It appears on the title search and has to be accounted for at closing.
Baltimore City's rate is the highest in Maryland, so taxes are a large part of the payment. Use the full city rate with no homestead credit.
Residential. We treat buildings of 1 to 8 units as residential and finance them with DSCR loans that qualify on rent. Buildings with nine or more units move to commercial multifamily financing.
At least 20%, and often more. Purchases go up to 80% LTV on some programs, but maximum leverage on 5-8 units is often lower and varies by program, loan size and the building's ratio.
No. A DSCR loan qualifies on the building's rent, with no W-2s or tax returns. You will need a 620 or higher credit score, the rent roll and leases, and bank statements showing down payment and reserves.
There are options. A lower loan amount raises the ratio, sub-1.0 DSCR programs exist for buildings that are close, and rents that are below market can sometimes be addressed at lease renewal before a refinance.
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