Charleston's older neighborhoods are full of large houses that were divided into apartments decades ago, plus brick walk-ups from the early 1900s. Buildings of five to eight units sit in a useful middle ground: too big for most small-property loans, too small for many commercial lenders.
In short: LendingStreet finances 5 to 8 unit residential buildings in Charleston and the Kanawha Valley with DSCR loans that qualify on the building's rent roll, with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, and the standard minimum DSCR is 1.0x. Maximum LTV on 5-8 unit properties can be lower than on smaller rentals and varies by program.
The East End, close to the Capitol and downtown, has the largest concentration of converted houses and small apartment buildings. Many were grand homes that became rooming houses or apartments as the city changed. The West Side and areas near downtown have brick walk-ups with five to eight units.
Kanawha City and South Charleston have some newer garden-style buildings in this size range, typically with more parking and simpler layouts.
Tenants in these buildings include state workers, hospital staff, students at the University of Charleston and service workers downtown. Units close to the Capitol, CAMC General and the downtown core tend to lease quickly when they are clean and well maintained.
Most residential programs stop at four units, and most commercial programs prefer larger buildings. Our 5-8 unit DSCR program treats these properties as residential investments, qualifying on the rent roll and using the same basic structure as smaller DSCR loans. Buildings with 9 or more units are commercial; see our multifamily page for those.
The difference matters because many commercial lenders want larger loans, shorter terms or more financial documentation. A DSCR loan with a 30-year term available can be a better fit for an investor who plans to hold a small apartment building for years.
This example is illustrative and not a quote. An investor buys a six-unit East End building for $420,000. Each unit rents for $650, for $3,900 a month. Taxes are budgeted at $525 a month and insurance at $300.
At 75% LTV the loan is $315,000 and estimated principal and interest is about $2,203. The full payment is about $3,028 and DSCR is about 1.29x. If the program caps this building at 70% LTV, the loan is $294,000, the payment about $2,881 and DSCR about 1.35x.
The table shows how leverage changes the result. Lower leverage on 5-8 unit properties is common, so plan for a larger down payment than you would on a duplex or fourplex.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $315,000 | $294,000 |
| Estimated monthly payment | $3,028 | $2,881 |
| DSCR | 1.29x | 1.35x |
A converted house can be a great rental, but the conversion has to be legal and safe.
If the building was converted long ago, the city may not have complete records. A title search, the assessor card and a conversation with the city's planning and code offices can confirm the legal unit count before you commit.
We underwrite on the rent roll, comparing each unit's rent with market rent. A building with several below-market leases can still qualify, but the DSCR uses actual rent unless leases are renewed. Owner-paid utilities are common in older buildings, so understand your full operating costs even though the DSCR focuses on principal, interest, taxes and insurance.
Leases matter too. Month-to-month tenants are common in older buildings. Signed 12-month leases make the rent roll easier to underwrite and can help the appraisal.
Inside Charleston, a rental building is taxed in Class IV at a 60% assessment ratio, with levy rates higher than owner-occupied homes. Insurance for older multi-unit buildings can be higher, especially for frame construction and buildings in flood zones near the rivers. Get quotes before you finalize your offer.
Ask the seller for the last two years of tax bills and insurance declarations. They show what the building has actually cost to carry, and they help you spot a tax bill that still reflects an older assessment or a policy with gaps in coverage.
Some 5-8 unit buildings come with vacancies or deferred maintenance. A bridge loan can fund the purchase and repairs, followed by a DSCR refinance once the building is leased. Plan the refinance numbers before you buy.
When planning repairs, focus on what tenants and appraisers value: roofs, heating, plumbing, electrical, safe stairways and clean common areas. Cosmetic upgrades help, but systems come first in older East End buildings.
A 5-8 unit building needs more management than a single rental. Plan for turnover, common-area cleaning, trash, snow removal on steep streets and coordination of repairs. Many owners hire a local property manager, and lenders like to see a clear management plan.
Check whether the city requires rental registration or inspections, and keep records of any code enforcement work. A well-documented building is easier to finance, refinance and eventually sell.
Send the address, price, rent roll, leases, expense history and insurance quote. Include photos and any recent inspection reports. We will tell you the likely loan amount and DSCR.
Tell us whether the building has a manager, how rents are collected and when leases renew. A short summary is enough to start.
Yes. LendingStreet finances 5 to 8 unit residential buildings in Charleston and the Kanawha Valley with DSCR loans. The rent roll drives the DSCR.
It varies by program and is often lower than for 1-4 unit rentals. Larger balances can also lower the maximum. Reserves and experience also matter.
Under our 5-8 unit program it is treated as residential. Buildings with 9 or more units are commercial.
No. The loan qualifies on the building's rent roll. Rents are compared with market rent.
Yes, if the unit count is legal and the building meets code. Confirm with the city before you buy. Separate meters and fire safety are part of the review.
The DSCR uses actual leases, so vacancies lower it. A bridge loan can fund the lease-up, then you refinance.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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