Manchester has more small apartment buildings than most cities its size. Brick blocks near the Millyard, wood-frame six-family buildings on the West Side and converted houses downtown give investors a real choice of 5-8 unit properties, often at prices that still let the rent cover the debt.
In short: LendingStreet finances 5-8 unit residential buildings in Manchester with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, require a 620 minimum credit score and can close in an LLC, with 30-year terms available. Max LTV on 5-8 unit buildings can be lower than on 1-4 units and varies by program. Buildings with 9 or more units are commercial.
Many banks classify anything over four units as commercial, with short terms and personal financial review. Our DSCR program treats 5-8 unit buildings as residential investment property: the loan is sized on rent, and the term can be 30 years. For a Manchester building you plan to hold, that means a stable payment and no balloon to refinance in a few years.
It also opens the door for investors who have grown from two- and three-families and are ready for a larger building, but whose personal tax returns do not tell the full story of their portfolio. The building's rent is what qualifies the loan.
The city's 5-8 unit buildings tend to fall into a few types, each with its own issues.
Buildings near the Millyard and downtown also benefit from renters who work in the converted mill buildings, at the hospitals and at the college campuses in the city, which keeps vacancy short for well-kept units. Parking is the main complaint in those blocks, so buildings with off-street spaces tend to lease faster.
| Type | Where | What to check |
|---|---|---|
| Brick block, often 6 units | Near the Millyard and Center City | Central boiler, masonry, fire code |
| Wood-frame six-family | West Side, East Side | Porches and stairs, separate heat, lead paint |
| Converted large house | Near downtown and the North End | Legal unit count, egress, parking |
| Newer small building | Edges of the city | HOA or association, separate meters |
This example is illustrative and not a quote. An investor buys a six-unit brick building near the Millyard for $900,000. Each unit leases for $1,450, or $8,700 a month. The building has a central boiler and the owner pays heat, averaging about $700 a month over the year. Taxes are $1,150 a month and insurance is $450.
At 75% LTV the loan is $675,000, estimated principal and interest is about $4,605, and the total payment is about $6,205, a DSCR of about 1.40x. At 70% LTV the payment is about $5,898 and the DSCR about 1.48x. Owner-paid heat is not in the ratio on most programs, but after heat, monthly cash before other expenses is about $1,795 at 75% LTV.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $675,000 | $630,000 |
| Estimated principal and interest | $4,605 | $4,298 |
| Taxes and insurance | $1,600 | $1,600 |
| Total monthly payment | $6,205 | $5,898 |
| DSCR at $8,700 rent | 1.40x | 1.48x |
| Cash after payment and owner-paid heat | $1,795 | $2,102 |
In a Manchester building with a central boiler, heating fuel is often the largest expense after taxes. Oil and gas prices move, and a cold January can double a month's bill. Get two years of fuel bills from the seller and budget on the higher year.
Converting to separate systems is expensive in a brick building but can pay off over time. If you plan it, include it in your purchase budget or a later cash-out.
Look at the boiler's age and service records, the condition of radiators and piping, and whether the building has a backup plan if the boiler fails on a January night. Tenants without heat are a habitability problem, so a failing central system is a cost you will face quickly after closing.
Buildings with five or more units face stricter fire and life safety rules than smaller ones: interconnected alarms, fire-rated separations, egress and, in some cases, sprinkler requirements after major renovations. Ask the city fire marshal's office about open violations, and have your inspector look at stairs, exits and alarms. Insurance carriers will ask about the same items.
Exterior stairs and porches on wood-frame six-families deserve special attention. They take a beating from New Hampshire winters, and rebuilding them to current code can be a significant cost. Get a contractor estimate before you finalize your offer if they look tired.
Nearly all of Manchester's small apartment buildings predate 1978. Renovation work must follow lead-safe rules, and state law can require abatement in units where a child has an elevated blood lead level. Ask for any lead records, and budget for lead-safe work at unit turnover.
Windows, doors and porches are the most common lead hazards because paint wears and turns to dust where surfaces rub. Replacing original windows with new units during turnovers reduces the hazard and improves heating costs at the same time.
Appraisers value 5-8 unit buildings on comparable sales and the income the building produces. Manchester has enough small building sales to give appraisers reasonable comparables, but condition and heat setup can swing value. A building with separate tenant-paid heat and updated porches will usually appraise above a similar building with a tired central boiler, even at the same rents, because buyers price in the cost of fixing those items. A full rent roll, leases, a year of expenses and fuel bills help support the numbers.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the building, price, rent roll and expenses, and we will show the ratio at a few loan sizes. For 9 or more units, see our multifamily loans page. Call (877) 298-1001 or use the form below.
If you are moving up from two- and three-families, tell us what you own now. Your experience with older Manchester buildings counts, and we can show how a 5-8 unit purchase fits alongside your existing loans.
Yes. Our DSCR program covers 5-8 unit residential buildings, qualified on combined rent, with 30-year terms available.
Max LTV on 5-8 units can be lower than on 1-4 units and varies by program. Many Manchester buildings clear 1.0x at 70% to 75%.
Most programs focus on principal, interest, taxes, insurance and HOA dues. Heat still reduces your cash flow, so budget for it.
No. The loan qualifies on the building's rent.
Open violations can delay or block a loan and affect insurance. Check with the fire marshal and fix issues early.
Yes. LLC borrowers are standard.
Those are commercial properties. See our multifamily loans page.
Yes, with a DSCR cash-out refinance, within the program's LTV limit and if the rent covers the new payment.
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