Springfield's rental market runs on state government, two large hospital systems and a medical school. Small apartment buildings near the Capitol and the medical district rent steadily at modest prices, and the ratio usually turns on Illinois property taxes rather than the rent.
In short: LendingStreet finances 5-8 unit buildings in Springfield, Chatham, Sherman and the rest of Sangamon County with DSCR loans that qualify on combined rent, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, and leverage on 5-8 units varies by program. Budget carefully for property taxes, which are high in Illinois, and for owner-paid utilities in older buildings.
Enos Park, just north of downtown and the medical district, has large older houses split into units and small brick buildings, many within walking distance of Memorial and HSHS St. John's hospitals and the SIU School of Medicine. The Near South and the blocks around Washington Park add early 1900s walk-ups and conversions.
West of downtown, the Leland Grove and Westchester areas have well-kept small buildings at higher prices. On the edges of the city and in Chatham, Sherman and Rochester, 1970s and 1980s garden buildings with parking are common.
Downtown itself has some upper-floor apartments over storefronts, but most 5-8 unit buildings that fit residential DSCR programs are in the surrounding neighborhoods.
| Area | Typical building | Tenant base |
|---|---|---|
| Enos Park and medical district | Older conversions and brick walk-ups | Hospital staff and medical students |
| Near South and Washington Park | Early 1900s buildings | State workers and families |
| West side | Well-kept small buildings | Professionals |
| Chatham and Sherman | 1970s-80s garden buildings | Commuters and families |
State government is the largest employer, and legislative sessions bring short-term demand on top of a steady base of state workers. The hospitals and medical school add residents, nurses and researchers, and the University of Illinois Springfield brings students to the east side.
Rents are modest compared with the Chicago area, but so are prices. That combination tends to produce ratios above 1.0x when taxes and utilities are budgeted correctly.
A building with five to eight units is still residential for our DSCR programs, so it qualifies on the property's rent rather than your personal income. There are no W-2s or tax returns to collect, LLC borrowers are standard and the minimum credit score is 620. Loans start at $150,000 with no stated maximum, and 30-year terms are available.
The ratio is the combined monthly rent of every unit divided by the full monthly payment: principal, interest, taxes and insurance. The standard minimum is 1.0x, and sub-1.0 programs exist for buildings that fall a little short. Maximum LTV on 5-8 unit buildings can be lower than the 80% purchase and 75% cash-out ceilings that apply to smaller rentals; it varies by program.
Expect the appraiser to review the rent roll unit by unit and compare each rent with similar units nearby. Leases well above the local market can be questioned, and vacant units need a supportable rent figure, so a clean rent roll matters as much as the purchase price.
Illinois property taxes are among the highest in the country. Outside Cook County, property is reassessed on a four-year cycle through township assessors, and the county board of review handles appeals. Your bill depends on the township, school district and other taxing bodies, and Illinois uses a one-third assessment ratio in most counties.
The seller's bill may reflect exemptions you will not get or an old assessment. Budget on a figure tied to your purchase price.
Illinois charges a state transfer tax of $0.50 per $500 and a county transfer tax of $0.25 per $500. Some municipalities add their own, so ask your title company.
This example is illustrative and not a quote. An investor buys a seven-unit brick building near the medical district for $500,000. The units rent for $800 each, for a combined $5,600 a month. Taxes are budgeted at $1,083 a month and insurance at $417.
At 75% LTV the loan is $375,000, estimated principal and interest is about $2,622 and the total payment is about $4,122, for a DSCR of about 1.36x. At 70% LTV the loan drops to $350,000, the payment to about $3,947 and the DSCR rises to about 1.42x. Taxes are about 2.6% of price, typical for downstate Illinois, yet the building still clears 1.0x comfortably. If the owner pays heat, subtract that before deciding the deal works.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $500,000 | $500,000 |
| Combined monthly rent | $5,600 | $5,600 |
| Loan amount | $375,000 | $350,000 |
| Estimated principal and interest | $2,622 | $2,447 |
| Taxes and insurance | $1,500 | $1,500 |
| Total monthly payment | $4,122 | $3,947 |
| DSCR | About 1.36x | About 1.42x |
Many older Springfield buildings heat with a boiler and radiators, often with the owner paying for gas and sometimes electricity in common areas. City Water, Light and Power provides electric and water service, and owner-paid utilities reduce net income.
Roofs, masonry, old plumbing and window replacement are common capital items. Pre-1978 buildings may have lead paint, which matters for renovations and for families with young children.
Illinois law prevents local rent control, so rents follow the market. Springfield has its own building and property maintenance codes, and the city can inspect rentals in response to complaints.
Ask the city whether any registration or inspection program applies to your building, and confirm the legal unit count before you buy.
Owners of older buildings should also keep up with smoke and carbon monoxide detector rules under Illinois law, and with the city's property maintenance code on exterior conditions.
Have these on hand when you request a quote.
Our investor loans are business-purpose loans on non-owner-occupied property. To get a quote, use the form below or call (877) 298-1001 with the address, units, current rents and price.
The LendingStreet team will check the ratio against a realistic tax and insurance budget and show what loan amount the rent supports. Investors comparing markets can also read our Illinois 5-8 unit DSCR page.
Illinois relies heavily on property taxes for schools and local government. Budget from the county record and your purchase price.
Illinois reassesses outside Cook County on a four-year cycle, with possible annual adjustments.
No. Illinois preempts local rent control.
Yes. We finance 5-8 unit buildings throughout Sangamon County.
Yes. Owner-paid utilities reduce net income, so include them in your budget.
On our DSCR programs, 1 to 8 units is residential. Nine or more units is commercial and is covered on our multifamily pages.
No. A DSCR loan qualifies on the property's rent. We do not collect W-2s or tax returns. The credit score minimum is 620.
You can bring more cash to lower the loan amount, or look at a sub-1.0 DSCR program if the numbers are close.
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