Buffalo is known for the Buffalo double, an upper-and-lower two-family, but the city also has large Victorian houses divided into apartments and brick buildings on the West Side and in Allentown. Prices per unit are low by New York standards, and cash flow can be strong.
In short: LendingStreet finances 5 to 8 unit rental buildings in Buffalo with DSCR loans that qualify on the building's rent, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum and the standard minimum DSCR is 1.0x. In Buffalo, budget for New York's mortgage recording tax at closing, the state's tenant protection rules and the wear that lake-effect winters put on older buildings.
Elmwood Village and Allentown have large Victorian and early 1900s houses divided into five or more apartments, along with brick buildings on Elmwood Avenue and nearby streets. The West Side has a mix of doubles, larger houses and small apartment buildings, often at lower prices. North Buffalo and Parkside have brick buildings near Delaware Park.
Renters include students and staff at the University at Buffalo, Buffalo State and Canisius, workers at the Buffalo Niagara Medical Campus, and long-term residents.
Prices per unit are modest, so many buildings can cover the payment at higher leverage than in downstate markets.
| Area | Typical 5-8 unit stock | What to check |
|---|---|---|
| Elmwood Village, Allentown | Divided Victorians, brick buildings | Historic district rules |
| West Side | Doubles, larger houses, small buildings | Condition, rehab quality |
| North Buffalo, Parkside | Brick apartment buildings | Heating and roofs |
| Black Rock, Riverside | Frame multi-families | Prices vs rents |
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.
Buffalo rents are lower than in downstate New York, but so are prices. We underwrite the leases in place and an appraiser's market rent estimate for vacant units.
New York charges a mortgage recording tax on the loan amount, paid by the borrower at closing. Outside New York City it is roughly 1% of the loan in many counties, so it adds real cash to your closing costs. The state transfer tax is customarily paid by the seller. Attorneys handle most New York closings. Confirm the current Erie County rate with your title company.
Buffalo property owners pay city and county taxes plus school taxes, and assessments can change after a citywide reassessment. Budget on the current bill and the likely post-sale assessment.
The 2019 Housing Stability and Tenant Protection Act applies statewide. It limits security deposits to one month's rent and restricts application fees and late fees. It also lets cities opt into rent stabilization under the Emergency Tenant Protection Act for buildings with six or more units built before 1974, after declaring a housing emergency. A six, seven or eight unit pre-1974 building is exactly the kind of property that law reaches. The 2024 Good Cause Eviction law applies in New York City and lets other cities opt in. Buffalo's status under these laws can change, so check before you buy.
Buffalo also has a rental registration and inspection program. Register the units after closing and keep inspection records on file.
This example is illustrative and not a quote. An investor buys a 5-unit divided Victorian in Elmwood Village for $520,000. The units rent for about $1,150 each, or $5,750 a month. Taxes are budgeted at $1,050 a month and insurance at $450.
At 75% LTV, the loan is $390,000. On a 30-year fixed, principal and interest is about $2,727, the full payment with taxes and insurance is about $4,227, and DSCR is about 1.36x. At 70% LTV, the loan is $364,000, principal and interest is about $2,545, the payment is about $4,045 and DSCR is about 1.42x.
Both loans clear 1.0x comfortably. Remember the mortgage recording tax: at roughly 1% of the loan, it adds several thousand dollars to cash at closing. The 70% loan needs about $26,000 more down.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Gross monthly rent | $5,750 | $5,750 |
| Loan amount | $390,000 | $364,000 |
| Principal and interest | $2,727 | $2,545 |
| Property taxes | $1,050 | $1,050 |
| Insurance | $450 | $450 |
| Total monthly payment | $4,227 | $4,045 |
| DSCR | About 1.36x | About 1.42x |
Lake-effect snow and long winters are hard on roofs, gutters, porches and heating systems. Insurers ask about roof age and heating type, and ice dams are a common source of claims.
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 Buffalo and Erie 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.
A tax on the loan amount, paid by the borrower at closing. In many upstate counties it is roughly 1% of the loan. Confirm the current Erie County rate.
Only if the city opts into the state Emergency Tenant Protection Act, which reaches pre-1974 buildings with six or more units. Check the current status before you buy.
No. New York limits security deposits to one month's rent statewide.
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.
Yes. LLC borrowers are standard on our DSCR loans. The members usually sign for the loan personally, and we will ask for the LLC's formation documents and operating agreement.
Yes. DSCR cash-out refinances go up to 75% LTV, often lower on 5-8 units, and the rent must still cover the new, larger payment. Seasoning requirements vary by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so the building you finance with us cannot be your home.
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