Las Cruces has a quiet supply of small apartment buildings: single-story courts from the 1950s and 1960s, two-story six- and eight-plexes near campus, and casita clusters on deep lots. They are too big for a fourplex loan and too small for most commercial lenders, which is where a 5-8 unit DSCR loan fits.
In short: LendingStreet finances 5 to 8 unit residential buildings in Las Cruces with DSCR loans that qualify on the combined rent of all units, not your personal income. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Maximum LTV on 5-8 unit properties can be lower than on single-family homes and varies by program.
Much of the stock is near New Mexico State University and in the older parts of town between downtown and the campus. You will see one-story motor-court layouts with units around a shared yard, small two-story stucco buildings with exterior stairs, and lots where a main house and several casitas have been rented separately for years.
Tenants are a mix of students, NMSU staff, hospital workers and long-term local renters. Units tend to be one and two bedrooms with modest rents, so the building's overall rent roll, not any one unit, carries the loan.
The appraiser values the building and prepares a rent schedule for each unit. The loan is then sized so the combined rent covers the full payment, including principal and interest, taxes, insurance and any HOA, at the program minimum. Programs differ on how they treat vacancies and below-market leases, so a current rent roll matters.
This example is illustrative and not a quote. An investor buys a six-unit building near NMSU for $672,000. Each unit rents for about $880, so the building brings in $5,280 a month. Taxes are estimated at $525 a month and the building insurance quote is $360.
At 70% LTV the loan is $470,400, estimated principal and interest is about $3,130, and the total payment is about $4,015 for a DSCR of about 1.32x. At 75% LTV, where a program allows it, the ratio drops to about 1.25x. Because maximum leverage on 5-8 units varies by program, it helps to run both.
| Item | 70% LTV | 75% LTV |
|---|---|---|
| Loan amount | $470,400 | $504,000 |
| Estimated principal and interest | $3,130 | $3,353 |
| Taxes and insurance | $885 | $885 |
| Total monthly payment | $4,015 | $4,238 |
| DSCR at $5,280 rent | About 1.32x | About 1.25x |
Many small Las Cruces buildings are 50 years old or more. Flat roofs, original plumbing, older electrical service and evaporative coolers serving each unit are common. None of these rule a building out, but they affect insurance, the appraisal and your repair budget.
If a building has units that were added without permits, such as a converted garage or a casita built later, expect questions. The appraisal and the loan generally count only the units that are legal.
Buildings near NMSU follow the academic calendar. Leases often start in August, and units that turn over in May can sit empty through the summer if they are not pre-leased in the spring. That seasonality matters for the loan: a building that is half vacant in June may look weaker on paper than it really is. Time your purchase or refinance so the rent roll reflects a normal occupancy month, or be ready to show the history.
Shared utilities are another local wrinkle. Older courts often have one water meter and sometimes one gas meter for all units, with the owner paying and recovering the cost through rent. Those expenses do not go into the DSCR formula the way taxes and insurance do, but they affect your real cash flow, so price them into your offer.
Many investors hire a local property manager for buildings this size. Management fees, maintenance and turnover costs are worth estimating before you buy, even though the loan qualifies on gross rent and the core payment.
Residential leases in New Mexico are governed by the state's Uniform Owner-Resident Relations Act, which sets rules for deposits, notices and repairs. Las Cruces does not have local rent control. Check current state law and any city requirements before you change leases or rents after closing.
A building with up to 8 units stays residential. A fourplex uses the same DSCR approach with combined rent, often at higher leverage. Buildings with 9 or more units are commercial, which we cover on our multifamily loans page.
| Property | Loan type | Leverage |
|---|---|---|
| Duplex to fourplex | DSCR, combined rent | Up to 80% LTV on purchases |
| 5 to 8 units | DSCR, combined rent | Can be lower, varies by program |
| 9+ units | Commercial multifamily | Set by commercial terms |
Doña Ana County taxes residential property at a 33.33% assessment ratio, and a building's value may be reset after a sale, so budget on your purchase price. Insurance on an older building with flat roofs can run higher per unit than on a single-family home. Get both numbers before you sign. Ask the insurer whether the building's age, wiring and roof type limit coverage, and whether separate liability coverage for common areas is required.
Send the address, price, rent roll and any operating history through the form below, or call (877) 298-1001. Include notes on meters, recent repairs and any units that are being renovated, since those details shape how the rent schedule and insurance are reviewed. For statewide terms, see our New Mexico 5-8 unit page.
Residential. Buildings with 1 to 8 units qualify for residential DSCR loans. Nine or more units are commercial.
Maximum LTV on 5-8 units can be lower than on single-family homes and varies by program, so plan on more than 20% down in many cases.
No, but leases help. Vacant units are usually counted at market rent from the appraisal, depending on the program.
Yes, if the units are legal and total 5 to 8. Unpermitted units are generally not counted.
No. The loan qualifies on the building's combined rent.
Yes. LLC borrowers are standard.
No. Leases follow New Mexico state law. Confirm current rules before changing rents.
Yes. Rate-and-term and cash-out refinancing are available on 5-8 unit buildings, qualified on the current rent roll. Cash-out leverage can be lower on these properties and varies by program.
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