Indiana is a value market for small multifamily, with older buildings in Indianapolis, Fort Wayne and Evansville that often have strong rent-to-price ratios. The state's property tax caps help, and there is no transfer tax.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Indiana 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. Indiana caps property taxes on residential rental property at 2% of gross assessed value and has no transfer tax, so the rent roll and building condition usually decide the ratio.
Indianapolis has small brick buildings and converted houses in Fountain Square, Irvington, Herron-Morton and the near east side, plus 1960s and 1970s buildings in the suburbs. Fort Wayne and Evansville have older small buildings at lower prices.
South Bend near Notre Dame, Bloomington near Indiana University and Lafayette near Purdue have small buildings serving students, with lease cycles tied to the academic year.
LendingStreet treats 1 to 8 units as residential, so a five-, six-, seven- or eight-unit building in Indiana 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. Indianapolis has a good volume of small multifamily sales; smaller cities may require broader comparable searches.
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.
Indiana's constitution caps property taxes at 1% of gross assessed value for homesteads, 2% for residential rental property and 3% for commercial property. A 5-8 unit rental generally falls under the 2% cap, which makes tax budgeting easier. Use the actual bill and confirm with the county.
Indiana does not charge a real estate transfer tax, only a sales disclosure fee. Title, recording and lender costs make up most of closing costs.
Indiana sees hail, straight-line wind and tornado claims, so carriers price roofs closely and may apply a wind or hail deductible. Older Indianapolis doubles and brick buildings often draw questions about wiring, galvanized plumbing and boiler or furnace age.
Parts of the state along the White River, the Wabash and the Ohio sit in flood zones, and Evansville in particular has low-lying areas near the river. If flood coverage is required, it goes into the DSCR payment along with the main policy.
This example is illustrative and not a quote. An investor buys an Indianapolis eight-unit building for $760,000. Each of the 8 units rents for $1,000 a month, for $8,000 in total. Property taxes are budgeted at $13,000 a year and the whole-building insurance quote is $8,000 a year.
At 75% LTV the loan is $570,000, leaving $190,000 down before closing costs. On 30-year amortization, principal and interest is about $3,986 a month. Adding $1,750 for taxes and insurance brings the payment to about $5,736, so the DSCR is about 1.39x, above the 1.0x standard minimum. If underwriting counted one unit as vacant with no market rent support, the ratio would drop to about 1.22x, which is why signed leases and the appraiser's rent analysis matter.
| Item | Amount |
|---|---|
| Purchase price | $760,000 |
| Units and gross monthly rent | 8 units, $8,000 |
| Loan at 75% LTV | $570,000 |
| Principal and interest (30-year) | About $3,986 |
| Taxes and insurance per month | About $1,750 |
| Total monthly payment | About $5,736 |
| DSCR | About 1.39x |
Indiana's landlord-tenant law is generally considered landlord-friendly, and state law preempts local rent control. Indianapolis requires owners to register rental properties with the city, and other cities have their own registration or inspection rules, so check before you close.
Buildings near Indiana University, Purdue and Notre Dame usually run on academic-year leases that start in August. Underwriting reads lease dates, so a building bought in early summer may show signed leases that have not yet started; keep those organized with the rent roll.
Having these together before you apply keeps the appraisal and underwriting on schedule.
These loans fit investors in Indiana 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 Indiana 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.
Residential rental property is generally capped at 2% of gross assessed value, which limits how high the bill can go. The actual bill can be lower depending on local rates.
Yes. Indianapolis requires rental property registration. Check the requirements for your property before closing.
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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