Montana has few large apartment complexes outside its biggest cities, so the 5 to 8 unit building fills a real gap: older brick walk-ups in Butte and Great Falls, small complexes in Billings and tight infill buildings in Missoula and Bozeman.
In short: Yes. LendingStreet finances 5 to 8 unit rental buildings in Montana with DSCR loans that qualify on the building's rent, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum, the standard minimum DSCR is 1.0x and the minimum credit score is 620, while maximum LTV on 5 to 8 units can be lower than on 1 to 4 units and varies by program. In Montana, high prices in Bozeman and Missoula and heavy winter operating costs are what usually limit the loan amount.
Missoula and Bozeman have the strongest rental demand in the state, driven by the University of Montana, Montana State University and steady in-migration. Small apartment buildings there tend to be infill projects, older houses converted into several units, or 1960s and 1970s two-story buildings near campus.
Billings, the largest city, has more conventional small complexes on the West End and Heights, often priced well below Bozeman. Great Falls, Helena and Butte have historic brick buildings near their downtowns, some with original heating systems and long-tenured tenants. Those buildings can carry strong ratios, but condition and deferred maintenance get a close look.
| Area | Typical buildings | What to check |
|---|---|---|
| Missoula, Bozeman | Infill buildings, campus-area conversions | High price per unit; ratio is often tight |
| Billings | 1970s to 1990s small complexes | Roof, parking lot and boiler age |
| Butte, Great Falls, Helena | Historic brick walk-ups | Heating system, masonry, electrical updates |
The ratio is simple: total monthly rent from all units divided by the monthly payment, which includes principal, interest, property taxes, insurance and any HOA dues. On standard programs it has to reach 1.0x, and a higher ratio can improve terms. Sub-1.0 programs exist for buildings that fall a little short.
Appraisers on 5 to 8 unit buildings usually look at both comparable sales and the income the building produces, and they give an opinion of market rent for each unit. If the in-place rents are well below market, underwriting generally works from the leases you actually have, so a building with old below-market leases may size smaller than its potential suggests.
For our programs, 5 to 8 units is still residential, so the loan is underwritten like a larger version of a fourplex loan rather than a commercial apartment loan. The difference is that maximum LTV can be lower on 5 to 8 unit properties and on larger balances, and reserve requirements can be higher. Both vary by program.
| Term | What to expect |
|---|---|
| Property type | 5 to 8 unit residential rental |
| Loan amount | From $150,000, no stated maximum |
| Purchase LTV | Up to 80% on some programs; often lower on 5-8 units |
| Cash-out LTV | Up to 75%; varies by program |
| Minimum DSCR | 1.0x standard; sub-1.0 programs exist |
| Credit score | 620 minimum |
| Income documents | None; qualifies on rent |
| Borrower | LLC standard; sign for the loan personally |
Montana does not have a real estate transfer tax, which keeps closing costs on a 5 to 8 unit purchase lower than in many states. Your main closing items are title insurance, recording fees, the appraisal and lender costs, all shown on your term sheet.
Property taxes are set by the state Department of Revenue appraisal cycle and local mill levies, and recent reappraisals pushed values up sharply in fast-growing counties. Budget on the current assessed value and the current levy, not the seller's older bill, and confirm the figure with the county treasurer.
Montana winters are hard on older multifamily buildings. Snow load on flat or low-slope roofs, frozen pipes in vacant units and aging boilers all show up in inspections and insurance quotes. Many older buildings have owner-paid heat, which raises operating costs and narrows the ratio.
In western Montana, wildfire exposure is now a regular underwriting topic for insurers, and some carriers limit new policies in high-risk areas near the wildland edge. Get a quote early on any building outside a city core.
This example is illustrative and not a quote. An investor buys a Missoula six-unit building for $1,150,000. Each unit rents for about $1,450 a month, so gross rent is $8,700. Property taxes are budgeted at $900 a month and insurance at $475. The owner also pays about $350 a month in utilities and common-area costs, which affect cash flow but are not part of the DSCR payment.
At 75% LTV the loan is $862,500. On 30-year amortization, principal and interest is about $6,031, so the payment with taxes and insurance is about $7,406 and the DSCR is about 1.17x.
That clears the 1.0x standard minimum. After the owner-paid costs, about $944 a month is left before vacancy, repairs and management, which is why a realistic expense budget matters as much as the ratio.
| Item | 75% LTV |
|---|---|
| Purchase price | $1,150,000 |
| Gross monthly rent | $8,700 |
| Loan amount | $862,500 |
| Principal and interest | $6,031 |
| Property taxes | $900 |
| Insurance | $475 |
| Monthly payment (PITI) | $7,406 |
| DSCR | About 1.17x |
Montana's Residential Landlord and Tenant Act sets the basic rules for deposits, notices and entry. Rents in university towns follow the academic year, so check lease end dates: a building with most leases ending in May can show high turnover in the summer.
Some cities, including Bozeman, regulate short-term rentals by zoning district, and resort areas such as Whitefish have their own rules. Most 5 to 8 unit DSCR loans in Montana are underwritten on 12-month leases.
Around Whitefish, Big Sky and the gateway towns near Glacier and Yellowstone, small buildings may rent to seasonal workers or visitors. Seasonal income is harder to document than 12-month leases. If you plan to rely on it, bring rent rolls that cover a full year, and confirm local short-term rental rules before you count nightly income.
A complete package gets a faster, clearer answer on a 5 to 8 unit building.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, rent roll and the loan amount you want. The team will run the ratio on realistic taxes and insurance, check it at a few loan amounts and come back with options, including sub-1.0 DSCR programs where they fit. Use the form below or call (877) 298-1001.
Buildings with nine or more units are commercial; for those, see our multifamily page.
No. Montana has no real estate transfer tax. You still pay title, recording, appraisal and lender costs, so ask your title company for an estimate.
Prices per unit in Bozeman and Missoula are much higher, while rents have not risen as fast. The same rent supports a smaller payment relative to the price, so leverage often has to come down.
Yes. If you pay for heat, budget for it as a real operating cost. Underwriting focuses on rent against principal, interest, taxes and insurance, but heat and utilities affect your real cash flow in a Montana winter.
On our programs, 1 to 8 units is residential, so 5, 6, 7 and 8 unit buildings qualify for a DSCR loan on rent. Nine or more units moves to commercial financing.
Purchase loans go up to 80% LTV on some programs, but 5 to 8 unit buildings and larger balances often get less. Plan for 20% to 30% down plus reserves, depending on the program and the ratio.
No. The loan qualifies on the building's rent. You need a 620 or higher credit score, reserves and entity documents if you buy in an LLC.
Vacant units can often be counted at a market rent the appraiser supports, but some programs want a minimum number of units leased. It varies by program, so tell us about vacancies up front.
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