Massachusetts invented the triple-decker, and its six-family buildings, sometimes called double deckers, are common from Worcester to New Bedford. Rents are strong in many cities. Building age, lead paint law and property taxes are what make Massachusetts 5-8 unit files different.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Massachusetts 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 Massachusetts, the state's strict lead paint law, the deeds excise and municipal property taxes, and older building systems are the items to check before you size a 5-8 unit loan.
Worcester has many six-family buildings and triple-deckers in neighborhoods such as Main South, Vernon Hill and Grafton Hill. Boston's Dorchester, Roxbury, Jamaica Plain and East Boston have six-unit buildings and triple-deckers at much higher prices, and Somerville and Cambridge add more.
Lowell, Lawrence, Springfield, Fall River, New Bedford and Brockton have older small buildings at lower prices, often with better rent-to-price ratios than Greater Boston.
LendingStreet treats 1 to 8 units as residential, so a five-, six-, seven- or eight-unit building in Massachusetts 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. Massachusetts has frequent small multifamily sales, and six-family buildings usually have close comparables.
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.
Massachusetts charges a deeds excise on transfers, usually paid by the seller. Buyers pay recording, title and lender costs.
Property taxes are set by each city or town, limited overall by Proposition 2 1/2, and many cities have a residential exemption that only applies to owner-occupants. Budget a rental at the full rate.
Insurers ask about heating systems, wiring, roofs and porches on older wood-frame buildings. Some need upgrades before a carrier will write a policy.
Coastal areas have flood and wind exposure. A whole-building quote is the number to use.
This example is illustrative and not a quote. An investor buys a Worcester six-family building for $1,250,000. Each of the 6 units rents for $1,850 a month, for $11,100 in total. Property taxes are budgeted at $16,000 a year and the whole-building insurance quote is $10,500 a year.
At 75% LTV the loan is $937,500, leaving $312,500 down before closing costs. On 30-year amortization, principal and interest is about $6,555 a month. Adding $2,208 for taxes and insurance brings the payment to about $8,763, so the DSCR is about 1.27x, above the 1.0x standard minimum. If underwriting counted one unit as vacant with no market rent support, the ratio would drop to about 1.06x, which is why signed leases and the appraiser's rent analysis matter.
| Item | Amount |
|---|---|
| Purchase price | $1,250,000 |
| Units and gross monthly rent | 6 units, $11,100 |
| Loan at 75% LTV | $937,500 |
| Principal and interest (30-year) | About $6,555 |
| Taxes and insurance per month | About $2,208 |
| Total monthly payment | About $8,763 |
| DSCR | About 1.27x |
Massachusetts has one of the strictest lead paint laws in the country. If a child under six lives in a pre-1978 unit, the owner must delead it. Ask for letters of compliance during due diligence.
Massachusetts banned local rent control in 1994, though some cities have sought to revisit it. Boston requires rental registration and inspections.
Having these together before you apply keeps the appraisal and underwriting on schedule.
These loans fit investors in Massachusetts 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 Massachusetts 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.
If a child under six lives in a pre-1978 unit, the owner must delead it. Ask the seller for letters of compliance.
Yes. LendingStreet treats 1 to 8 units as residential, so a six-family building is underwritten on its rent.
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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