Connecticut is a small multifamily state. Three-family houses and six-family buildings, sometimes called perfect sixes, line the streets of Hartford, New Haven, Bridgeport and Waterbury, and many investors move from 2-4 units into 5-8 unit buildings as they grow.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Connecticut with DSCR loans that qualify on the building's rent, starting at $150,000 with no stated maximum and LLC borrowers standard. Purchases can go up to 80% LTV and cash-out up to 75%, though maximum leverage on 5-8 units varies by program. Connecticut's high mill rates, its conveyance tax and the age of most buildings are the items that move the ratio, along with any local fair rent commission rules.
Hartford neighborhoods such as Parkville, Frog Hollow and the South End have brick and wood-frame six-family buildings, often two stacked three-family houses with front and rear porches. New Haven has similar buildings in Fair Haven, the Hill and around Yale, and Bridgeport and Waterbury have many older 5-8 unit properties at lower prices.
New Britain, Meriden and Norwalk add more stock. Most Connecticut small buildings were built before 1940, so condition, heat source and lead paint history are standard questions.
LendingStreet treats 1 to 8 units as residential, so a five-, six-, seven- or eight-unit building in Connecticut is underwritten as a rental property rather than a commercial loan. The loan qualifies on the building's rent: total monthly rent divided by the full monthly payment, including principal, interest, taxes, insurance and any association dues.
Standard programs look for 1.0x or better, and sub-1.0 programs exist for buildings that come up a little short. Maximum leverage on 5-8 unit properties is often lower than on a single-family rental and varies by program and loan size.
A 5 to 8 unit building is usually appraised with more weight on the income approach than a house would be. The appraiser compares its rents with similar small buildings nearby and reconciles that with sales comparables. Connecticut's cities have frequent small multifamily sales, so appraisers can usually find close comparables, especially for six-family buildings.
Underwriting works from the rent roll and the leases. Expect to provide a current rent roll showing each unit, its rent and lease dates, plus copies of the leases. Vacant units are usually counted at the appraiser's market rent, and some programs use the lower of actual and market rent.
Connecticut property taxes are high and set by each town's mill rate, and cities like Hartford, Bridgeport and Waterbury are among the highest. On a 5-8 unit building, taxes can be the largest line in the payment after principal and interest. Use the current assessment and check when the town's next revaluation is due.
Connecticut charges a real estate conveyance tax, made up of a state portion and a municipal portion, usually paid by the seller. Buyers still pay recording and title costs, so confirm totals with your closing attorney.
Older wood-frame buildings with oil heat, knob-and-tube wiring remnants or old porches can draw higher insurance quotes or exclusions. Carriers often ask about the heating system, the oil tank and the age of electrical service.
Coastal towns along Long Island Sound have flood and wind exposure. Inland, most of the cost comes from building age and construction type.
This example is illustrative and not a quote. An investor buys a Hartford six-family building for $840,000. Each of the 6 units rents for $1,525 a month, for $9,150 in total. Property taxes are budgeted at $19,000 a year and the whole-building insurance quote is $8,800 a year.
At 75% LTV the loan is $630,000, leaving $210,000 down before closing costs. On 30-year amortization, principal and interest is about $4,405 a month. Adding $2,317 for taxes and insurance brings the payment to about $6,722, so the DSCR is about 1.36x, above the 1.0x standard minimum. If taxes came in $3,000 a year higher after reassessment, the ratio would fall to about 1.31x.
| Item | Amount |
|---|---|
| Purchase price | $840,000 |
| Units and gross monthly rent | 6 units, $9,150 |
| Loan at 75% LTV | $630,000 |
| Principal and interest (30-year) | About $4,405 |
| Taxes and insurance per month | About $2,317 |
| Total monthly payment | About $6,722 |
| DSCR | About 1.36x |
Connecticut requires larger towns to have fair rent commissions, which can hear tenant complaints about excessive increases. Hartford and New Haven also have rental licensing or inspection programs. Keep records of rent history and condition.
Lead paint is common in pre-1978 buildings, and Connecticut has lead abatement rules when a child is affected. Ask for any lead inspection reports during due diligence.
Having these together before you apply keeps the appraisal and underwriting on schedule.
These loans fit investors in Connecticut who want to qualify on the building's income instead of personal tax returns, hold title in an LLC and finance on a 30-year term. Our investor loans are business-purpose loans on non-owner-occupied property, so a building where you plan to live in one of the units is not eligible.
If the building needs heavy renovation or has several vacant units, a short-term bridge loan and a later refinance into a DSCR loan can be the better path. Buildings with nine or more units are commercial; see our multifamily loans page for those. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet finances 5 to 8 unit investment buildings in Connecticut with DSCR loans from $150,000, qualified on the building's rent with LLC borrowers standard.
LendingStreet treats 1 to 8 units as residential, so a 5 to 8 unit building is underwritten as a rental property on its rent. Nine or more units is commercial lending.
Connecticut towns rely on property taxes, and urban mill rates are among the highest in the country. On a small building, the tax bill can be a large part of the DSCR payment, so use the actual assessment.
Residential. LendingStreet treats 1 to 8 units as residential, so a six-family building is underwritten as a rental property on its rent.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so the building has to be fully used as a rental.
Vacant units are usually counted at the appraiser's market rent, and some programs use the lower of actual and market rent. Several vacancies can reduce the loan amount, and a bridge loan may be the better first step.
Yes, up to 75% LTV on standard programs, often lower on 5-8 units. The rent still has to cover the new payment, and seasoning rules vary by program.
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