North Carolina's fast-growing metros have more fourplexes and garden complexes than classic walk-ups, but 5 to 8 unit buildings do come up, especially near campuses and in older neighborhoods close to downtown.
In short: LendingStreet makes DSCR loans on 5, 6, 7 and 8 unit residential rentals in North Carolina, sized on the building's rent rather than your income. Expect a 620 minimum credit score, a 1.0x standard minimum ratio and leverage that varies by program, often a little below what a fourplex gets. In North Carolina, hurricane and flood exposure in the east, storm risk in the mountains and moderate taxes shape how a 5 to 8 unit building sizes.
Charlotte has small buildings in Plaza Midwood, NoDa, Dilworth, Elizabeth and along older corridors close to uptown, many of them 1950s and 1960s brick buildings with six or eight units. In the Triangle, Raleigh, Durham and Chapel Hill have small complexes near NC State, Duke and UNC, plus older buildings close to downtown Durham and the Oakwood and Mordecai areas of Raleigh.
Greensboro, Winston-Salem, Fayetteville, Greenville and Wilmington have more moderate prices and plenty of small complexes from the 1960s to 1980s, often near campuses such as UNC Greensboro, East Carolina and UNC Wilmington, or near Fort Bragg in Fayetteville. In Asheville, small buildings are scarce and priced high, and ratios are usually tight.
| Area | Typical buildings | What to check |
|---|---|---|
| Charlotte, Raleigh, Durham | Small complexes and infill | High prices per unit; tighter ratios |
| Greensboro, Winston-Salem, Fayetteville | 1960s to 1980s complexes | Roof, HVAC, deferred maintenance |
| Wilmington and coast | Older buildings near water | Wind and flood insurance |
Underwriting adds up the rent from every unit, using signed leases and the appraiser's market rent opinion, and divides it by the full monthly payment: principal, interest, taxes, insurance and HOA dues if any. Standard programs look for 1.0x or better.
Taxes and insurance carry more weight on a 5 to 8 unit building than on a single-family rental, because the bills are bigger and they sit inside the payment. A tax bill that is $300 a month higher than you planned, or an insurance quote that jumps at renewal, can move the ratio more than a modest change in rate.
Because 5 to 8 units is treated as residential on our programs, you qualify on rent with no W-2s or tax returns. What changes from a fourplex is leverage: purchase loans go up to 80% LTV on some programs, but 5 to 8 unit buildings often get less. Plan your down payment with that in mind.
| 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 |
Coastal counties face hurricane and wind risk, and insurance costs there are higher. Inland flooding from storms like Helene in 2024 showed that western North Carolina also has flood risk.
Get a quote and a flood determination early. If the building is in a mapped flood zone, flood insurance is generally required and the premium counts in the ratio.
North Carolina charges an excise tax on deeds, customarily paid by the seller. Buyers pay title, recording, appraisal and lender costs.
Property taxes are moderate and set by county and city. Counties reappraise on their own cycles, and some recent revaluations raised values sharply. Check the current bill and the next revaluation date.
This example is illustrative and not a quote. An investor buys a Durham six-unit building for $1,100,000. Each unit rents for about $1,550 a month, so gross rent is $9,300. Property taxes are budgeted at $700 a month and insurance at $350. The owner also pays about $300 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 $825,000. On 30-year amortization, principal and interest is about $5,769, so the payment with taxes and insurance is about $6,819 and the DSCR is about 1.36x.
That clears the 1.0x standard minimum. After the owner-paid costs, about $2,181 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 | $1,100,000 |
| Gross monthly rent | $9,300 |
| Loan amount | $825,000 |
| Principal and interest | $5,769 |
| Property taxes | $700 |
| Insurance | $350 |
| Monthly payment (PITI) | $6,819 |
| DSCR | About 1.36x |
North Carolina law does not allow cities to adopt rent control, so rent changes follow the market and lease terms. The state Residential Rental Agreements Act sets basic landlord duties.
Asheville and some other cities regulate short-term rentals in residential zones. Most 5 to 8 unit buildings are underwritten on long-term leases.
Population growth in Charlotte and the Triangle keeps rental demand strong, while land and construction costs make new 5 to 8 unit buildings rare. That leaves the existing stock, much of it older, in high demand from both renters and investors. Buildings near job centers, hospitals and campuses are often well occupied.
Prices have risen with demand, so the ratio is often tighter in Charlotte and Raleigh than in Greensboro or Fayetteville. Use actual leases and conservative rent growth, and run the numbers on the next tax revaluation rather than the current one if a revaluation is coming.
Gather these before you reach out and the appraisal and underwriting move faster.
Our investor loans are business-purpose loans on non-owner-occupied property. Share the property address, rent roll, purchase price or current loan, and your target loan amount. We will size the ratio with real tax and insurance figures and show you what each loan amount does to it. Get a quote with the form below or call (877) 298-1001.
If the building has nine or more units, it falls under commercial financing instead; see our multifamily loans page.
By custom the seller pays the excise tax. Buyers pay title, recording, appraisal and lender costs.
State law does not allow local rent control. Rents follow the market and lease terms.
If it is in a mapped flood zone, flood insurance is generally required. Storms like Helene showed flood risk outside those zones too.
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.
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.
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