The Chicago six-flat, a three-story brick building with two apartments per floor, is one of the city's classic investments. Along with larger walk-ups, it gives investors a big supply of 5-8 unit buildings, but Cook County taxes and the city's landlord ordinance shape every deal.
In short: LendingStreet finances 5 to 8 unit rental buildings in Chicago, including six-flats, with DSCR loans that qualify on the building's rent. No W-2s or tax returns are needed, LLC borrowers are standard and loans start at $150,000 with no stated maximum. In Chicago, Cook County taxes, the Residential Landlord and Tenant Ordinance and porch condition are the first things to check.
Six-flats are common in Logan Square, Avondale, Albany Park, Rogers Park, Edgewater and Uptown on the North Side, and in Pilsen, Bridgeport and Hyde Park on the South Side. Many date to the 1910s and 1920s. Larger courtyard buildings usually have more than eight units and fall under commercial financing.
Humboldt Park, Bronzeville, Little Village and Chatham offer lower prices per unit. North Side lakefront areas command higher prices and rents.
Many buildings have garden units, and whether a garden unit is legal affects how many units we can count.
| Area | Typical 5-8 unit stock | What to check |
|---|---|---|
| Logan Square, Avondale | Six-flats, larger walk-ups | Rising prices, garden unit legality |
| Rogers Park, Edgewater, Uptown | Brick six-flats and walk-ups | Older systems, parking |
| Pilsen, Bridgeport | Brick buildings, some mixed-use | Storefront share |
| Hyde Park, Bronzeville | Greystones and walk-ups | Condition, tax bill |
Every unit's rent goes into one number, and that number is compared with the full payment, including taxes and insurance. If the rent covers the payment at 1.0x or better, the building clears the standard minimum. If it does not, a lower loan amount, a sub-1.0 program or a rent increase at turnover can close the gap.
Our programs treat buildings of 1 to 8 units as residential, so a five, six, seven or eight unit building qualifies the same way a single-family rental does: on rent, with no personal income documents. Maximum leverage is where 5-8 units differ. Purchase LTV can reach 80% on some programs but is often lower here and varies by program; cash-out goes up to 75%. Loans start at $150,000 with no stated maximum, terms run up to 30 years and the minimum score is 620. At nine units, the deal moves to commercial financing.
Chicago rents vary a lot by neighborhood. We underwrite actual leases, and we count only legal units, so an unpermitted garden unit may not add to the rent we use.
Cook County reassesses property every three years, by region, and the city's most recent reassessment raised values in many neighborhoods. The homeowner exemption only applies to owner-occupants. Use the current bill and check whether a reassessment or appeal is pending.
Chicago's real estate transfer tax is paid mostly by the buyer, with a smaller portion paid by the seller, on top of state and county transfer taxes. It is a meaningful closing cost on a 5-8 unit purchase. Illinois also blocks cities from adopting rent control.
Chicago's Residential Landlord and Tenant Ordinance covers most rental units in the city, but exempts owner-occupied buildings with six or fewer units. An investor-owned 5-8 unit building is covered. The ordinance has strict rules on security deposits, including how they are held, interest and receipts, and mistakes can be costly.
Chicago's Fair Notice ordinance requires longer notice for rent increases and non-renewals for tenants who have been in place longer. Build those timelines into any rent plan.
When you buy, transfer security deposits correctly and send tenants the required notices.
This example is illustrative and not a quote. An investor buys a six-flat in Logan Square for $1,500,000. The six units rent for about $1,900 each, or $11,400 a month. Taxes are budgeted at $2,500 a month and insurance at $700.
At 75% LTV, the loan is $1,125,000. On a 30-year fixed, principal and interest is about $7,770, the full payment with taxes and insurance is about $10,970, and DSCR is about 1.04x. At 70% LTV, the loan is $1,050,000, principal and interest is about $7,252, the payment is about $10,452 and DSCR is about 1.09x.
At 75% the building barely clears 1.0x, and a higher tax bill after reassessment could push it under. At 70% there is more room, for about $75,000 more at closing.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Gross monthly rent | $11,400 | $11,400 |
| Loan amount | $1,125,000 | $1,050,000 |
| Principal and interest | $7,770 | $7,252 |
| Property taxes | $2,500 | $2,500 |
| Insurance | $700 | $700 |
| Total monthly payment | $10,970 | $10,452 |
| DSCR | About 1.04x | About 1.09x |
Chicago has strict rules for rear wooden porches, which serve as the second exit on many six-flats, and insurers look at them closely. Older buildings may also have boilers, aging wiring and masonry that needs tuckpointing.
The items below cover most of what we ask for on a building this size.
We lend on 5-8 unit rentals across Chicago and Cook County. Our investor loans are business-purpose loans on non-owner-occupied property.
Get a quote through the form below or call (877) 298-1001. Share the rent roll, the price or current value and your target loan amount, and we will run the ratio at a few loan sizes on realistic tax and insurance numbers. If the building is not yet stabilized, ask about bridge financing with a planned refinance into a DSCR loan.
If you do not live in the building, yes. The ordinance exempts only owner-occupied buildings with six or fewer units, and our loans are for non-owner-occupied rentals.
Only if it is a legal unit. Unpermitted garden units usually cannot be counted toward the rent.
Most of the city transfer tax is paid by the buyer, with a smaller portion paid by the seller. State and county transfer taxes also apply.
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.
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.
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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