Portland's West End, Parkside and Munjoy Hill are full of big Victorians and brick buildings that were cut into five, six or eight apartments decades ago. These buildings sit in a useful middle ground: too big for a typical home loan, but still financed as residential property with a DSCR loan.
In short: LendingStreet offers DSCR loans on 5 to 8 unit residential buildings in greater Portland, Maine, qualified on the combined rent of all units with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, maximum LTV varies by program and is often lower than on 1-4 units, and LLC borrowers are standard. Buildings of nine or more units go to our commercial programs.
Most are on the peninsula. Parkside and the West End have large Victorian and Queen Anne houses converted to five to eight units. Munjoy Hill has three-story wood-frame and brick buildings, some with ground-floor commercial. Off the peninsula, a few early 20th century apartment buildings sit along Forest Avenue and in Woodfords Corner, and South Portland, Westbrook and Biddeford have small brick buildings near their old downtowns.
These buildings rarely come on the market, and many trade between local investors without wide marketing. When one does list, a buyer who can show a complete loan file and a clear plan for fire code and heat upgrades has an edge over one who is still sorting out financing.
The building qualifies on the combined rent of every unit compared with the full monthly payment. The appraisal will typically include a rent schedule for each unit. Expect closer review than on a duplex: a rent roll, copies of leases, and sometimes a look at operating expenses. Leverage varies by program and is often a step below 1-4 unit maximums.
Expect the appraiser to weigh both the sales comparison and the income approach. With few direct sales of six-unit Victorians, the income approach often carries more weight, so a clean rent roll and realistic market rents matter.
This example is illustrative and not a quote. An investor buys a six-unit Victorian conversion for $1,350,000. Units rent from $1,450 to $1,750, totaling $9,650 a month. Taxes are budgeted at $1,650 a month and insurance at $640, reflecting an older wood-frame building.
At 70% LTV the loan is $945,000, estimated principal and interest is about $6,447 and the total payment is about $8,737, for a DSCR of about 1.10x. At 75% LTV, if the program allows it, the loan is $1,012,500, the payment about $9,197 and the DSCR about 1.05x.
Notice how sensitive the ratio is to leverage on a building this size. A five percent change in LTV moves the payment by several hundred dollars a month, so the right loan amount is often a little below the maximum.
| Unit | Monthly rent |
|---|---|
| Unit 1 | $1,450 |
| Unit 2 | $1,500 |
| Unit 3 | $1,600 |
| Unit 4 | $1,650 |
| Unit 5 | $1,700 |
| Unit 6 | $1,750 |
| Total | $9,650 |
Five or more units in an older wood building raise fire safety questions that a duplex does not. Fire alarm systems, fire-rated separations, second means of egress and, in some cases, sprinklers may be required, especially after renovations or a change of use. Ask the seller for fire inspection records and budget for upgrades. Insurers will ask about these items too.
Ask whether any past renovations were permitted. Unpermitted unit splits or attic apartments are common in older conversions, and an unpermitted unit may not count toward rent or may need work before it can be legally occupied.
Many converted buildings share one boiler and one water meter, so the owner pays heat and water for all units. Those costs are not part of the DSCR formula, but they decide your real cash flow. Converting to separate heat pumps or meters is a common value-add plan that a later refinance can capture.
Separating utilities is also a capital project with its own permits and timelines. If that is your plan, consider whether to finance the purchase with a bridge loan first and move to a DSCR loan once the work is done and rents reflect the upgrades.
In Portland, each unit is registered with the city's rental housing program and may be covered by rent stabilization. On a six- or eight-unit building, those limits apply unit by unit. Collect the registration history and any rent notices from the seller.
On the peninsula, many 5-8 unit buildings have little or no off-street parking. That is normal there, but it affects which tenants the building attracts and how fast units lease. Winter parking bans during snowstorms are part of life in Portland, and tenants without driveways need a plan.
Snow removal, ice on exterior stairs and roof snow loads are ongoing owner costs. Budget for a plowing and shoveling contract and for periodic roof and gutter maintenance, and ask the insurer how the building's exterior stairs and fire escapes are viewed.
Have these ready to speed up review.
A building with nine or more units is commercial property and is underwritten differently. See our multifamily loans page for those. Send your 5-8 unit rent roll and address through the form below or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. For statewide notes, see our Maine 5-8 unit page.
For our programs, 1-8 units is residential and qualifies for DSCR financing. Nine or more units is commercial.
It varies by program and is often lower than on 1-4 unit properties. Larger balances can also lower the maximum.
The DSCR uses rent against principal, interest, taxes, insurance and HOA dues. We may also review expenses to understand the building.
Mixed-use buildings may fit our commercial programs. Tell us the layout and we will match you with the right one.
Market rent may be used on some programs, but a building with vacancies may fit a bridge loan first, then a DSCR refinance.
The program minimum is 620, though stronger credit can improve leverage on larger buildings.
Experience helps on larger buildings and can affect leverage. Tell us your history and we will match the program.
Yes. A blanket portfolio loan can include 5-8 unit buildings alongside smaller rentals when you have five or more properties.
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