Boston has a deep stock of small brick walk-ups, converted row houses and six-family buildings. They rent well, but high prices and an investor tax bill that is often larger than the seller's make the DSCR ratio tighter than in most of New England.
In short: LendingStreet finances 5 to 8 unit rental buildings in Boston with DSCR loans that qualify on the building's rent, with no W-2s or tax returns and LLC borrowers allowed. We treat 1 to 8 units as residential, loans start at $150,000 with no stated maximum, and the standard minimum DSCR is 1.0x. On Boston buildings, the realistic tax bill, lead compliance and leverage that often lands below 80% decide most files.
Allston and Brighton have many early 20th century brick walk-ups, often five to eight units on three or four floors, renting to students and young professionals near Boston University, Boston College and the hospitals. Mission Hill and the Fenway have similar buildings close to the Longwood Medical Area and Northeastern.
In the South End and Back Bay, the five to eight unit buildings are usually row houses that were divided into apartments decades ago. Dorchester, Roxbury, Jamaica Plain and East Boston are better known for triple-deckers, but larger wood-frame and brick buildings with five or more units show up there too, often with lower prices per unit.
Each area brings a different tenant base, different building age and different repair profile, and all of it shows up in the rent roll and the payment.
| Area | Typical 5-8 unit stock | What to check |
|---|---|---|
| Allston-Brighton, Mission Hill, Fenway | Brick walk-ups, 5 to 8 units | September 1 lease cycle, student turnover |
| South End, Back Bay | Row houses divided into apartments | Historic district rules, condo-style conversions |
| Dorchester, Roxbury, Jamaica Plain | Large wood-frame and brick multi-families | Lead compliance, porches and egress |
| East Boston | Wood-frame and brick buildings near the waterfront | Flood zone and insurance quote |
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.
Much of Boston's apartment stock turns over on September 1, so a building bought in spring may show leases that renew all at once. We underwrite the leases in place or market rent for vacant units, so expect to show signed renewals or a credible rent estimate.
Boston gives a residential exemption to owners who live in their property, which takes a large slice off the taxable value. Many small multi-families in Boston were bought by owner-occupants who claimed it. When an investor buys, the exemption comes off, and the next bill can be meaningfully higher than the one the seller paid.
Run your numbers on the full assessed value at the residential rate with no exemption, and ask the city assessing department for the property's current value. Massachusetts has no mortgage recording tax. The state deeds excise, a transfer tax on the sale price, is customarily paid by the seller, so a buyer's main closing costs are recording fees, title insurance, the attorney who handles the closing and prepaid taxes and insurance.
Rent control has been barred statewide since a 1994 ballot vote, though proposals to bring it back keep surfacing in the legislature and in ballot campaigns. Check the current status before you underwrite rent growth. Boston has asked the state for permission to adopt rent stabilization in the past, so watch for changes.
Boston runs a rental registry and inspection program for most rental units, with periodic inspections for many buildings. Register the units after closing and keep inspection records in your file.
The Massachusetts Lead Law applies to homes built before 1978 where a child under six lives. The owner is responsible for deleading or bringing the units under interim control, and a landlord cannot refuse to rent to a family with young children to avoid the law. In older buildings, ask for any letters of compliance or interim control and budget for deleading in units without them.
This example is illustrative and not a quote. An investor buys a 6-unit brick walk-up in Brighton for $3,000,000. The units rent for about $2,900 each, or $17,400 a month in total. Taxes are budgeted at $2,800 a month on the full assessed value with no residential exemption, and insurance at $700.
At 70% LTV, the loan is $2,100,000. On a 30-year fixed, principal and interest is about $14,326, the full payment with taxes and insurance is about $17,826, and DSCR is about 0.98x. At 65% LTV, the loan is $1,950,000, principal and interest is about $13,302, the payment is about $16,802 and DSCR is about 1.04x.
At 70% the building falls just short of the 1.0x standard minimum. Dropping to 65% means about $150,000 more cash at closing but clears the ratio. A sub-1.0 program is another way to keep the higher loan.
| Item | 70% LTV | 65% LTV |
|---|---|---|
| Gross monthly rent | $17,400 | $17,400 |
| Loan amount | $2,100,000 | $1,950,000 |
| Principal and interest | $14,326 | $13,302 |
| Property taxes | $2,800 | $2,800 |
| Insurance | $700 | $700 |
| Total monthly payment | $17,826 | $16,802 |
| DSCR | About 0.98x | About 1.04x |
Most Boston five to eight unit buildings are 80 to 120 years old. Insurers and appraisers look hard at heating systems, electrical service, rear porches and egress, and roofs. In East Boston and parts of the waterfront, check the flood map early.
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 Boston's neighborhoods, from Allston-Brighton and the Fenway to Dorchester, Jamaica Plain and East Boston.
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.
Usually because the seller lived in the building and received Boston's residential exemption. Investors do not get it, so budget on the full assessed value at the residential rate.
It can. If several leases expire at once, we may ask for renewals or a market rent estimate. Buying in a way that leaves time to sign renewals before closing makes the rent roll easier to support.
No. Massachusetts barred rent control in 1994. Boston has pursued rent stabilization through the state, so confirm current rules before you buy.
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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