Fairbanks has a good supply of small apartment buildings from the pipeline era, many near the university, downtown and the military bases. They can rent well, but in a city where winter lasts half the year, the boiler room is as important as the rent roll.
In short: LendingStreet finances 5 to 8 unit residential buildings in Fairbanks, North Pole and the borough with DSCR loans qualified on combined rent, with no tax returns or W-2s. Loans start at $150,000 with no stated maximum, maximum LTV on 5-8 units varies by program and is often lower than on 1-4 units, and the standard minimum DSCR is 1.0x. Buildings with 9 or more units use commercial financing.
Many 5-8 unit buildings were built in the 1970s and early 1980s during the trans-Alaska pipeline construction boom. You will find them near College Road and the university, in South Fairbanks and downtown, along the routes to Fort Wainwright, and in North Pole near Eielson commuting routes.
Tenants include students and university staff, junior enlisted military members who live off base, hospital workers and service employees. One- and two-bedroom units with parking and plug-ins for engine block heaters are standard expectations.
Many of these buildings trade between local owners without wide marketing. Relationships with property managers and agents who handle small multi-unit sales help you see them first.
This example is illustrative and not a quote. An investor buys a six-unit building near the university for $720,000. Each unit rents for $1,250, for $7,500 a month. At 75% LTV the loan is $540,000. Estimated principal and interest is about $3,730, and with assumed borough taxes and insurance the payment is about $5,030. The DSCR is about 1.49x.
The building has a shared boiler and the owner pays heat, assumed to average $900 a month over the year. That is outside the DSCR, but it brings cash flow before other expenses to about $1,570 a month.
Converting a building to individual unit heating, where practical, shifts fuel costs to tenants and can change the investment math, but it is a major project that needs careful budgeting.
| Item | Amount |
|---|---|
| Purchase price | $720,000 |
| Loan amount (75% LTV) | $540,000 |
| Estimated principal and interest (30-year) | $3,730 |
| Property taxes (monthly, assumed) | $780 |
| Insurance (monthly, assumed) | $520 |
| Total monthly payment | $5,030 |
| Monthly rent used | $7,500 |
| DSCR | 1.49x |
| Owner-paid heat, annual average (assumed) | $900 |
Most older Fairbanks multi-unit buildings use oil-fired boilers with baseboard or radiant heat. A boiler failure in January is an emergency: pipes can freeze in hours and tenants cannot stay. Lenders and insurers ask about boiler age and backup plans.
The ratio is calculated the same way as on smaller properties, but the review goes deeper: rent roll and leases for each unit, expense history, the condition of roofs, boilers, electrical and parking, the legal unit count and your experience. Reserves may be higher and maximum LTV varies by program.
At these prices, a six- to eight-unit building can often clear 1.0x where a single-family home in the same neighborhood would struggle, because combined rent is high relative to price.
Lenders may also look at how long the building has been fully leased and at turnover, especially near the bases where moves are frequent. Staggered lease dates and a mix of military, student and civilian tenants support stability.
Fairbanks North Star Borough taxes, plus City of Fairbanks or North Pole levies inside city limits, are a significant part of the DSCR payment on a multi-unit building. Use the current tax record. Insurance should cover the full building and loss of rents, and many owners consider earthquake coverage as well.
Ask for a quote that includes loss of rents coverage, which helps if a unit is damaged and empty during repairs in winter.
Older buildings on permafrost-affected ground can show settlement: sloping floors, cracked drywall and doors out of square. A structural review is worth the cost on any building with these signs, since repairs on a multi-unit building can be expensive and can affect value.
Some buildings sit on pilings or have had relevelling work. Ask for records and get a contractor's opinion on any ongoing maintenance needs.
Alaska is a non-disclosure state and Fairbanks has a limited number of small apartment sales, so appraisers lean on the income approach. Provide the rent roll, leases, 12 months of expenses including fuel and a list of capital improvements.
Expect the appraiser to request expense history, including fuel, utilities, repairs and management, as part of the income approach.
Buildings with many vacancies or major deferred maintenance may need a bridge or fix and flip loan first, followed by a 5-8 unit DSCR refinance once stabilized. For 9 or more units, see our multifamily loans page.
Lenders will want to see the renovation scope, budget and lease-up plan, so the refinance can be sketched out before you buy.
Send the rent roll, leases, expenses with fuel bills, the purchase contract or payoff and photos. Call (877) 298-1001 or use the form below.
We can also review a building you already own for a refinance on the same program.
Yes, for our programs 5-8 units are residential DSCR loans. Nine or more units are commercial.
It varies by program and is often lower than on 1-4 unit properties. Your term sheet will show the maximum for your building.
No, but it reduces your real cash flow, so review fuel bills before buying.
It may affect insurance, the appraisal and your budget. Many buyers negotiate replacement or a price reduction. Insurers also ask about boiler age and backup heat.
Many programs use market rent for vacant units, but a mostly vacant building may need a bridge loan first. Market rent is estimated by the appraiser.
It helps, and requirements vary by program. A local property manager with multi-unit experience can strengthen the file.
Mixed-use buildings fall under commercial or mixed-use programs.
No. Every loan we make is a business-purpose loan on non-owner-occupied investment property; we do not finance a home the borrower lives in.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.