In Albuquerque and Las Cruces, the small one- and two-story apartment building is a common rental. Prices per unit are moderate, property taxes are relatively low, and a 5 to 8 unit building can carry a healthy ratio.
In short: You can finance a 5 to 8 unit building in New Mexico with a LendingStreet DSCR loan that qualifies on rent, from $150,000 with no stated maximum and 30-year terms available. The rent has to cover principal, interest, taxes and insurance at 1.0x on standard programs, and sub-1.0 programs exist. In New Mexico, flat roofs, building condition and Santa Fe's short-term rental limits are the local items to check.
Albuquerque has the largest supply, with small buildings in Nob Hill, the University area near UNM, the Southeast Heights and near downtown. Many are 1950s to 1970s stucco buildings with flat or low-slope roofs and evaporative or older central cooling.
Las Cruces has small complexes near New Mexico State University. Santa Fe has fewer buildings and higher prices, often with adobe or pueblo-style construction. Smaller cities such as Roswell, Farmington and Rio Rancho have occasional buildings.
| Area | Typical buildings | What to check |
|---|---|---|
| Albuquerque: Nob Hill, UNM area | 1950s to 1970s stucco buildings | Flat roofs, cooling systems |
| Las Cruces near NMSU | Small complexes | Student turnover, lease dates |
| Santa Fe | Adobe and pueblo-style buildings | High prices; STR rules |
Start with the rent roll. Add the in-place rent for each unit and, for any vacant unit, a market rent the appraiser can support. Then divide by the full payment, including taxes and insurance. That ratio needs to be 1.0x or higher on standard programs.
Utilities the owner pays, such as common-area electric, water, sewer and trash, are not part of the DSCR payment on most programs, but they are part of your real cash flow. Budget for them separately so the deal still works after the loan closes, not just on the term sheet.
Leverage on 5 to 8 units varies by program and is often below the 80% purchase maximum available on smaller rentals. Cash-out refinances go up to 75% LTV, and seasoning rules vary. If the ratio comes in short, lowering the loan amount or using a sub-1.0 program are the usual fixes.
| 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 |
Flat and low-slope roofs are common, and ponding water and aging membranes are a frequent repair item. Insurers and appraisers ask about roof age. Many older buildings use evaporative coolers, which are cheaper to run but need regular service.
Hail and monsoon storms can damage roofs and stucco. Ask for the roof age and any storm claims before making an offer.
New Mexico does not charge a real estate transfer tax, which keeps closing costs moderate. You will still pay title, recording, appraisal and lender costs.
Property taxes are relatively low compared with many states. Increases for residential property are limited from year to year, but the assessed value can be reset after a sale. Use the county assessor's figures and expect the value to adjust after you buy.
This example is illustrative and not a quote. An investor buys an Albuquerque Nob Hill-area eight-unit building for $860,000. Each unit rents for about $1,000 a month, so gross rent is $8,000. Property taxes are budgeted at $575 a month and insurance at $375. The owner also pays about $400 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 $645,000. On 30-year amortization, principal and interest is about $4,510, so the payment with taxes and insurance is about $5,460 and the DSCR is about 1.47x.
That clears the 1.0x standard minimum. After the owner-paid costs, about $2,140 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 | $860,000 |
| Gross monthly rent | $8,000 |
| Loan amount | $645,000 |
| Principal and interest | $4,510 |
| Property taxes | $575 |
| Insurance | $375 |
| Monthly payment (PITI) | $5,460 |
| DSCR | About 1.47x |
New Mexico's Uniform Owner-Resident Relations Act sets rules for deposits, notices and entry. Albuquerque has rental registration requirements, so check with the city.
Santa Fe limits short-term rental permits in residential zones, and other cities have their own rules. A 5 to 8 unit building is almost always underwritten on 12-month leases.
Albuquerque's rental demand comes from the University of New Mexico, Kirtland Air Force Base, Sandia National Laboratories, the hospital systems and a growing film and media industry. Las Cruces draws from New Mexico State and White Sands. Rents are moderate, but so are prices, which is why many small buildings work at standard leverage.
The catch is condition. Many 5 to 8 unit buildings in Albuquerque were built quickly in the postwar decades and have had several owners. An inspection that covers the roof, cooling, plumbing and stucco will tell you more about your real return than the rent roll alone.
Most delays on small apartment loans come from missing items. Start with these.
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us about the building: address, unit mix, rents, taxes, insurance and the loan you have in mind. We will run the numbers, flag any local issues that could affect the file and give you options. Fill out the form below or call (877) 298-1001.
Nine or more units is commercial financing, covered on our multifamily loans page.
No. New Mexico does not charge a real estate transfer tax. You will still pay title, recording, appraisal and lender costs.
They can. Annual increases are limited, but the assessed value can reset after a sale. Ask the county assessor before you close.
Santa Fe limits short-term rental permits in residential zones. Most 5 to 8 unit buildings are financed on long-term leases.
Yes. Cash-out goes up to 75% LTV, often lower on 5 to 8 units, and the rent has to cover the new payment at the program minimum. Seasoning rules vary by program.
Our DSCR programs have no stated maximum. Loans start at $150,000, and larger balances are reviewed case by case, often with lower maximum LTV.
The standard minimum is 1.0x, meaning rent covers principal, interest, taxes and insurance. Sub-1.0 programs exist for buildings that fall a little short.
Yes. LLC borrowers are standard. You will sign for the loan personally, and you will need the LLC's formation documents and operating agreement.
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