In Burlington, a five- to eight-unit building is usually a big old house that has been carved up over a century: a Hill Section Victorian with six apartments, or an Old North End double house with a back building. Each one is a little different, and that is what lenders and appraisers look at closely.
In short: LendingStreet finances 5-8 unit residential buildings in Burlington and Chittenden County with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Buildings up to eight units stay in our residential program, starting at $150,000 with no stated maximum. Max LTV on 5-8 units can be lower than on smaller properties and varies by program; the standard minimum DSCR is 1.0x.
Most small apartment buildings in the city are conversions. Large Victorians in the Hill Section near UVM, multi-family houses in the Old North End and older homes downtown hold five to eight units with varied layouts. Purpose-built small buildings exist too, mostly from the mid-1900s, along with newer small buildings in Winooski and South Burlington.
Buyers for these buildings are mostly local and regional investors, and turnover is low, so a well-kept building can draw strong interest when it comes up. Prices per unit are often lower than for single-family homes, and the rent from several units spreads vacancy risk.
| Building type | Where | Main questions |
|---|---|---|
| Converted Victorian | Hill Section, near UVM | Legal unit count, egress, fire separation |
| Old North End multi-family | Old North End | Heating system, lead, foundation |
| Mid-century small building | Scattered in Burlington | Roof, parking, boilers |
| Newer small building | Winooski, South Burlington | Association or common costs |
Rental buildings in Vermont fall under state fire safety rules as well as Burlington's housing code. Multi-unit buildings need proper egress, fire separation between units, smoke and carbon monoxide detection and, depending on the building, more. Confirm that every unit you are buying is legal and that the building is registered with the city at that count. Units added without approval can lower value and complicate insurance.
Before closing, ask the seller for the city inspection history and any open violations. Life-safety items like missing egress or fire separation can take time and money to fix, and insurers ask about them.
If units were added decades ago, the city may have records showing when they were approved. A title company or local attorney can help track them down.
We add up the rent from all units and compare it with the full payment: principal and interest, taxes, insurance and any dues. Vacant units are usually counted at market rent supported by the appraisal, though some programs look more closely at occupancy. In student-heavy buildings, have a history showing the June-to-May leasing pattern.
Rents in converted Victorians vary by unit because layouts differ. A large two-bedroom on the first floor may rent well above an attic studio, so the appraiser looks at each unit separately. A detailed rent roll with unit sizes helps.
This example is illustrative and not a quote. An investor buys a six-unit converted Victorian in the Hill Section for $1,150,000. Units rent for about $1,850 each, so combined rent is $11,100. Taxes at the non-homestead rate are $1,900 a month and insurance is $520.
At 75% LTV the loan is $862,500, estimated principal and interest is about $5,884, the payment is about $8,304 and the DSCR is about 1.34x. If the program limits the building to 70% LTV, the loan is $805,000, the payment is about $7,912 and the ratio is about 1.40x.
Your numbers will depend on the price, the actual rent roll, the tax bill on that parcel and the insurance quote. Use the DSCR calculator to test your building before you make an offer, and remember that a reappraisal can move the tax figure.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $862,500 | $805,000 |
| Estimated principal and interest | $5,884 | $5,492 |
| Taxes and insurance | $2,420 | $2,420 |
| Total payment | $8,304 | $7,912 |
| DSCR at $11,100 rent | 1.34x | 1.40x |
Older Burlington buildings often have a single oil or gas boiler, so the owner pays heat. That cost does not show in the DSCR payment but can be the biggest line in the operating budget. Pre-1978 buildings must follow Vermont's lead law, with Essential Maintenance Practices and annual compliance filings. Add common electric, snow removal, trash and turnover, and keep a separate budget.
A written operating budget kept alongside the DSCR calculation will show whether the building really cash flows. Many experienced owners in Burlington budget heat separately and review it every winter.
Our DSCR program treats buildings up to eight units as residential, with a 30-year term option and qualification on rent. Nine or more units moves to our multifamily program.
That keeps the file in residential underwriting, which focuses on the building's rent and your credit rather than personal income or business financials.
If you own several small buildings, a blanket portfolio loan can combine five or more properties under one loan with one payment and release provisions for future sales.
Refinancing works the same way. If you already own a small building, we can show rate-and-term and cash-out options and how the ratio changes at each leverage level.
Insurers look at the age of the roof, wiring, plumbing and heating system on older Burlington buildings, as well as the number of units and the fire safety setup. Knob-and-tube wiring or an old oil tank can limit coverage options or raise the premium.
Get a quote early in your inspection period, and include the full premium in your ratio. If an insurer asks for updates as a condition of coverage, add them to your budget and timeline before closing.
Send the rent roll, address and price through the form below or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. See our Vermont 5-8 unit page for statewide notes.
Yes. Our DSCR program covers 1-8 units; nine or more units goes to multifamily.
It varies by program and is often lower than on 1-4 units.
No. The loan qualifies on combined rent compared with the full payment.
A lease history showing the June-to-May pattern helps support market rent for each unit.
Egress, fire separation, smoke and carbon monoxide detection, and the building's status with state fire safety and the city.
Often the owner, with a shared boiler. It is not in the DSCR payment but matters for cash flow.
Yes. A bridge loan can buy a building with vacancies, and a DSCR loan can refinance it once leased.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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