Raleigh grew faster than its housing stock for most of the past decade, and older small apartment buildings close to downtown and NC State rarely sit empty. The catch is that Wake County reappraises on a schedule, and a new valuation can change the tax line on a building in a single year.
In short: LendingStreet finances 5-8 unit buildings in Raleigh and the wider Triangle with DSCR loans that qualify on the building's combined rent, with no W-2s or tax returns and LLC borrowers allowed. Loans begin at $150,000 with no stated maximum, and leverage on 5-8 units varies by program. Budget taxes on a post-reappraisal value and check zoning if you plan to add units.
Small apartment buildings are scattered through older neighborhoods around downtown: Oakwood, Mordecai, Boylan Heights and Glenwood-Brooklyn have converted houses and 1940s-60s walk-ups. Around NC State, the Avent Ferry and Western Boulevard corridors hold small brick buildings that lease to students and staff.
Outside the city, Garner, Wake Forest and older parts of Cary and Durham add more stock. Newer small buildings are also appearing under Raleigh's missing middle zoning changes, which allow townhomes and small multiplexes in more districts.
| Area | Building style | Tenant profile |
|---|---|---|
| Oakwood and Mordecai | Historic houses split into units | Downtown professionals |
| NC State corridors | 1960s-70s brick walk-ups | Students and university staff |
| Garner and Wake Forest | Small newer buildings | Commuters and families |
| Durham (nearby) | Mill-era and infill buildings | Duke and Research Triangle Park workers |
Oakwood, Boylan Heights and several other neighborhoods are local historic districts, so exterior changes need approval from the Raleigh Historic Development Commission. That affects renovation plans, not the DSCR itself, but it can change your budget and timeline.
Investors building new under missing middle rules should look at our construction pages. Once a new building is leased, it can refinance into a DSCR loan on the rents in place.
Five to eight units is the top of the residential range; nine or more units moves into commercial lending. Inside that range the loan is approved on what the building rents for. No W-2s, no tax returns, a 620 minimum score, LLC ownership allowed, $150,000 minimum loan size with no stated maximum, and 30-year terms available.
The test is simple: total rent from all units divided by principal, interest, taxes and insurance. Most programs look for 1.0x or better, and sub-1.0 programs can work when the numbers are close. Purchase leverage can reach 80% LTV and cash-out 75% on smaller rentals, but on 5-8 unit buildings the maximum is often lower and varies by program.
The rent roll does a lot of the work. The appraiser checks every unit's rent against comparable rentals, and income that looks out of line with the area gets a closer look. Vacant or down units need a realistic rent and a plan for getting them leased.
Wake County reappraises all property on a multi-year cycle, and the most recent rounds raised values sharply in many neighborhoods. If you buy late in a cycle, the next reappraisal may raise your assessed value toward the purchase price. Budget on a value close to what you pay, and check the county and city tax rates.
North Carolina charges an excise tax on deeds of $1 per $500 of value, normally paid by the seller. There is no state mortgage tax. North Carolina law also bars local rent control, so rent levels follow the market.
This example is illustrative and not a quote. An investor buys a six-unit 1960s walk-up near Glenwood-Brooklyn for $1,250,000. Each two-bedroom unit rents for $1,425, for a combined $8,550 a month. Taxes are budgeted at $900 a month and insurance at $500.
A 75% LTV loan of $938,000 carries estimated principal and interest of about $6,559. Add taxes and insurance and the payment is about $7,959, a DSCR of about 1.07x. At 70% LTV, the $875,000 loan has a payment of about $7,518 and a DSCR near 1.14x. Taxes are budgeted on a value near the purchase price, in case the next Wake County reappraisal catches up. The building clears 1.0x at both leverage levels.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $1,250,000 | $1,250,000 |
| Combined monthly rent | $8,550 | $8,550 |
| Loan amount | $938,000 | $875,000 |
| Estimated principal and interest | $6,559 | $6,118 |
| Taxes and insurance | $1,400 | $1,400 |
| Total monthly payment | $7,959 | $7,518 |
| DSCR | About 1.07x | About 1.14x |
Raleigh is far enough inland to avoid coastal wind pools, but remnants of hurricanes still bring heavy rain and wind. Older buildings near Crabtree Creek and Walnut Creek can fall in mapped flood zones.
Insurers will ask about roof age, electrical panels and plumbing in older walk-ups. Get the quote and the flood determination during due diligence.
Buildings with older gas furnaces or window AC units may also draw questions. Replacing them can help both the premium and tenant retention.
Buildings near campus often run on 12-month leases that start in August, sometimes with parents co-signing. Turnover is predictable but concentrated. A DSCR loan can work well here because it looks at the rent roll, not your personal income.
Check whether the city's occupancy limits on unrelated tenants apply to your units, and whether leases are by the unit or by the bedroom.
Away from campus, buildings near WakeMed and the downtown office core lease to hospital staff and professionals on standard terms, which spreads turnover more evenly through the year.
A clean package gets a faster answer on a small apartment building.
LendingStreet makes business-purpose DSCR loans on non-owner-occupied rentals. Our investor loans are business-purpose loans on non-owner-occupied property, and we review 5-8 unit buildings across the Raleigh area.
Share the rent roll, the address and your target leverage in the form below or by phone at (877) 298-1001. We will size the loan at more than one LTV so you can see the tradeoff. Our North Carolina 5-8 unit DSCR page covers the statewide picture.
It can. A higher assessed value raises taxes, which raises the payment. Budget taxes near your purchase price.
No. North Carolina law prohibits local rent control, so rents follow the market.
Yes. The historic district affects exterior renovation approvals, not the loan itself.
It is normally paid by the seller at $1 per $500 of value. Confirm on your contract.
Yes. We finance 5-8 unit buildings across the Triangle, including Durham, Cary, Garner and Wake Forest.
Eight units. Up to eight units fits our residential DSCR programs; nine or more is commercial multifamily.
No. The loan qualifies on the building's rent. There are no W-2s or tax returns, and the minimum credit score is 620.
Sometimes. Sub-1.0 DSCR programs are available, and putting more down is the other common fix.
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