Maine's 5 to 8 unit buildings are mostly old: wood-frame apartment houses from the mill era in Lewiston, Biddeford and Bangor, and Victorian buildings split into flats in Portland. They can carry well on rent, as long as heat, lead paint and the insurance quote are priced up front.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Maine 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. In Maine, older wood-frame construction, heating costs, the state transfer tax and Portland's rent stabilization rules are the items that most often shape a 5-8 unit deal.
Lewiston and Auburn have a large stock of mill-era apartment houses, many with six to eight units stacked over three floors, built to house textile and shoe workers. Biddeford and Saco have similar buildings near their downtown mills, and Bangor, Waterville and Augusta have older multi-unit houses near their centers.
Portland's West End, Munjoy Hill, Parkside and East Bayside have Victorian and early 1900s buildings converted into five to eight apartments, at much higher prices than the rest of the state. South Portland and Westbrook add smaller buildings in between.
LendingStreet treats 1 to 8 units as residential, so a five-, six-, seven- or eight-unit building in Maine 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. Portland has steady small multifamily sales; in Lewiston, Bangor and smaller towns, appraisers may reach further for comparable 5-8 unit sales.
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.
Maine charges a real estate transfer tax on deeds, split between buyer and seller by statute, so the buyer pays part of it at closing. Ask your title company for the exact figure.
Property taxes are set by each municipality, and older mill cities often carry higher mill rates than suburbs. Maine's homestead exemption applies only to a primary residence, so budget the building at its full assessment.
Insurers look hard at old wood-frame buildings: heating systems, oil tanks, electrical service and fire separation between units. Some older buildings need upgrades before a carrier will write a policy at a workable price.
Winter is the other factor. Roof condition, ice dams and frozen pipes are common claims, and heat is often owner-paid on older buildings, which does not enter the DSCR payment but does reduce cash flow.
This example is illustrative and not a quote. An investor buys a Lewiston six-unit apartment house for $690,000. Each of the 6 units rents for $1,150 a month, for $6,900 in total. Property taxes are budgeted at $11,500 a year and the whole-building insurance quote is $7,200 a year.
At 75% LTV the loan is $517,500, leaving $172,500 down before closing costs. On 30-year amortization, principal and interest is about $3,618 a month. Adding $1,558 for taxes and insurance brings the payment to about $5,177, so the DSCR is about 1.33x, above the 1.0x standard minimum. If the insurance quote came in $300 a month higher, the ratio would fall to about 1.26x, which is why a firm quote matters before you set your offer.
| Item | Amount |
|---|---|
| Purchase price | $690,000 |
| Units and gross monthly rent | 6 units, $6,900 |
| Loan at 75% LTV | $517,500 |
| Principal and interest (30-year) | About $3,618 |
| Taxes and insurance per month | About $1,558 |
| Total monthly payment | About $5,177 |
| DSCR | About 1.33x |
Most Maine 5-8 unit buildings were built well before 1978, and the state has lead-safe requirements for rentals, especially where children live. Ask for any lead inspection or abatement records during due diligence.
Portland has a rent stabilization ordinance that limits annual increases on many units and requires rental registration, with some exemptions. Underwriting uses the rent you can collect, so know the rules before you price a Portland building.
Having these together before you apply keeps the appraisal and underwriting on schedule.
These loans fit investors in Maine 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 Maine 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.
Maine splits the transfer tax between buyer and seller by statute, so you will pay part of it at closing. Your title company will calculate the amount.
It can. The ratio is based on the rent you can collect, so if increases are capped, the loan is sized on current rents rather than projected ones.
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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