Louisville has one of the largest collections of Victorian homes in the country, and many of them were divided into apartments long ago. For 5-8 unit investors, that history creates both character and diligence work.
In short: LendingStreet finances 5 to 8 unit rental buildings across Louisville Metro and Jefferson County with DSCR loans that qualify on rent, not tax returns. Loans start at $150,000 with no stated maximum and a 1.0x standard minimum DSCR. In Louisville, confirm the legal unit count on converted homes, register with the Metro rental registry and check flood maps near the Ohio River and Beargrass Creek.
Old Louisville, south of downtown near the University of Louisville, is the standout: large Victorian homes converted to five, six or more apartments, plus small brick apartment buildings. The Highlands, Cherokee Triangle and Crescent Hill have similar conversions at higher rents.
Germantown, Schnitzelburg and Clifton have shotgun homes and small buildings, while Portland, Shelby Park and Smoketown offer lower prices and more renovation work. Suburban St. Matthews and Jeffersontown have 1960s garden buildings.
| Area | Typical stock | Investor note |
|---|---|---|
| Old Louisville | Converted Victorians, brick walk-ups | Legal unit count, preservation rules |
| Highlands and Crescent Hill | Converted homes, small buildings | Higher rents, limited supply |
| Germantown and Clifton | Small buildings, shotguns | Strong demand, older systems |
| St. Matthews and Jeffersontown | 1960s garden buildings | Workforce tenants |
A converted mansion may have six apartments in practice and fewer on record. Check Metro zoning and permit records to confirm the legal unit count, and look at fire separation, egress and utility metering. Appraisers value buildings on the legal unit count.
Old Louisville is a preservation district, and exterior changes need review by the Metro landmarks staff or commission. That protects the neighborhood but can raise renovation costs.
Shotgun doubles and camelback homes are common in Germantown and Schnitzelburg, but those are two-unit properties. A true five to eight unit building in those neighborhoods is usually a corner commercial-style building with apartments above or a small purpose-built walk-up, and they trade less often.
This example is illustrative and not a quote. An investor buys a converted Victorian in Old Louisville with six legal apartments for $720,000. Gross rent is $6,300 a month, an average of $1,050 for each of the 6 units, and the monthly budget includes $660 in taxes and $380 in insurance.
A $540,000 loan (75% LTV) carries estimated principal and interest of about $3,776, a full payment near $4,816 and a ratio of about 1.31x. Dropping to 70% LTV, or $504,000, brings the payment to about $4,564 and the ratio to about 1.38x; the investor needs $36,000 more cash.
The ratio works at both leverage levels. Renovation inside the preservation district would take longer and cost more, which matters for a later cash-out refinance.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $720,000 | $720,000 |
| Loan amount | $540,000 | $504,000 |
| Down payment | $180,000 | $216,000 |
| Estimated principal and interest | $3,776 | $3,524 |
| Property taxes (monthly) | $660 | $660 |
| Insurance (monthly) | $380 | $380 |
| Total monthly payment | $4,816 | $4,564 |
| Gross monthly rent | $6,300 | $6,300 |
| DSCR | About 1.31x | About 1.38x |
The Jefferson County property valuation administrator assesses property at full market value, and reassessments can follow a sale. Kentucky's homestead exemption is limited to seniors and people with disabilities on their primary home, so it does not apply to a rental. Budget taxes using the current state, Metro, school and any urban services district rates on your purchase price.
Kentucky charges a deed transfer tax of $0.50 per $500 of value, typically paid by the seller.
Louisville Metro tax bills combine state, Metro government, school and, inside the old city limits, urban services district rates. Two buildings with similar values can carry different bills depending on which districts they sit in, so pull the exact parcel record from the PVA.
Louisville Metro requires landlords to register rental properties, and the city uses the registry for code enforcement and contact information. Confirm the building is registered and ask for any open code cases.
Louisville has adopted tenant protection measures in recent years, including rules around source of income. Use a manager who follows current Metro ordinances.
The Ohio River floodwall protects much of the city, but low areas near Beargrass Creek and in the western and southwestern parts of the county are in mapped flood zones. Flash flooding has also hit neighborhoods during heavy rains. Check the FEMA map and get a flood quote where needed.
Older masonry buildings need roof, chimney and foundation checks. Share inspection results with your agent.
Hospitals downtown and in the medical center, UPS Worldport at the airport, Ford's two Louisville plants and the University of Louisville give the metro a broad base of renters. Buildings near Bardstown Road, Frankfort Avenue and the university tend to lease fastest.
A building with five to eight units is still residential financing, so it qualifies on rent the way a single-family rental does. In Louisville, the appraiser's rent schedule and any signed leases set the income, and the ratio compares that income with principal, interest, taxes, insurance and any association dues. No W-2s or tax returns are needed.
Loans start at $150,000 with no stated maximum. Purchases can reach 80% LTV and cash-out refinances 75% LTV, but on 5-8 units the top leverage is often lower and varies by program. The standard minimum DSCR is 1.0x, the minimum credit score is 620, LLC borrowers are standard and 30-year terms are available. If the ratio lands just under 1.0x, a sub-1.0 DSCR program may fit.
Get a quote with the form below or by calling (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property, and every 5-8 unit file is reviewed on the building's own cash flow. Compare with our Kentucky 5-8 unit DSCR page for state-level rules, and note that nine units and up is a commercial loan.
Yes. Louisville Metro requires landlords to register rental properties.
It is $0.50 per $500 of value, typically paid by the seller.
Exterior work needs preservation review, which can add time and cost.
Only in mapped zones, but check the FEMA map near Beargrass Creek and the western parts of the county.
Yes. Our DSCR program covers Indiana too. Indiana has a 2% cap on rental property taxes and different rules than Kentucky.
Yes. LLC borrowers are standard on our DSCR loans, and you sign for the loan personally as part of the process.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so every unit must be rented to tenants.
The standard minimum is 1.0x, meaning rent covers the full monthly payment. Sub-1.0 programs exist for some buildings with strong value and reserves.
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