St. Paul has a deep stock of small apartment buildings: brick walk-ups near Cathedral Hill and Summit-University, converted Victorian houses on the side streets off Summit Avenue, and 1960s sixplexes on the East Side. At 5 to 8 units, they still qualify as residential for our DSCR loans.
In short: LendingStreet finances 5-8 unit residential buildings in St. Paul with DSCR loans that qualify on the combined rent of all units, with no tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum, and max LTV on 5-8 units varies by program and can be lower than on 1-4 units. In St. Paul, rent stabilization and the Fire Certificate of Occupancy program are central to how these buildings are underwritten.
Cathedral Hill, Summit-University and the area around Grand Avenue have many early 1900s brick buildings and converted houses with five to eight units. Mac-Groveland and Merriam Park have courtyard and walk-up buildings that lease to students and young professionals. On the East Side and in the North End, 1950s to 1970s sixplexes and eightplexes are simpler buildings with lower prices.
Older buildings often have one boiler, shared laundry and owner-paid heat. Newer ones usually have separate meters and lower operating costs.
| Building type | Where common | Underwriting notes |
|---|---|---|
| Brick walk-up, pre-1930 | Cathedral Hill, Summit-University | Boiler, roof, masonry, owner-paid heat |
| Converted Victorian house | Side streets off Summit and Grand | Unit layouts, egress, fire separation |
| 1960s-70s sixplex or eightplex | East Side, North End, Highland edges | Separate meters, parking, deferred updates |
With six or eight tenants, St. Paul's rent stabilization ordinance matters even more. Covered units generally face a 3% annual cap on increases, with exceptions through the city. Underwrite on the current rent roll, and treat any gap between in-place and market rents as long-term upside, not an assumption for the loan. Ask the seller for a rent history and confirm the building's status under the current rules.
Multi-unit rentals in St. Paul are inspected through the Fire Certificate of Occupancy program. Request the certificate, the inspection grade or history and any open correction orders. Common items in older buildings include fire doors, stairway lighting, smoke detection, egress and boiler maintenance. These items can turn into holdbacks or required repairs before closing.
This example is illustrative and not a quote. An investor buys a 1960s sixplex for $780,000. Each unit rents for $1,250, so total rent is $7,500 a month. Taxes are budgeted at $1,150 a month and insurance at $450.
At 75% LTV the loan is $585,000. Estimated principal and interest is about $4,040, the total payment is about $5,640 and the DSCR is about 1.33x. If the program caps this building at 70% LTV, the loan is $546,000 and the DSCR rises to about 1.40x.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Loan amount | $585,000 | $546,000 |
| Estimated principal and interest | $4,040 | $3,771 |
| Taxes and insurance | $1,600 | $1,600 |
| Total payment | $5,640 | $5,371 |
| DSCR at $7,500 rent | 1.33x | 1.40x |
Minnesota classifies apartment buildings differently from single-family and small multi-unit rentals, so a five-unit building can carry a different effective tax burden than a fourplex of similar value. Pull the Ramsey County tax statement and valuation notice, and ask whether any recent sale or renovation will trigger a new value.
DSCR compares rent to principal, interest, taxes, insurance and any HOA. It does not include heat, water, trash, snow removal, hallway electricity or repairs, which are larger in an old St. Paul walk-up than in a duplex. Run a full operating budget alongside the ratio so the building cash flows after winter heating bills.
Our residential DSCR program covers buildings up to 8 units. A nine-unit or larger building is a commercial or multifamily loan with different underwriting, so see our multifamily loans page for those.
Many small apartment buildings in St. Paul have been owned by the same person or family for decades. That often means below-market rents, long-term tenants, deferred capital work and records kept on paper. These buildings can be good purchases, but the loan will be sized on what the building earns now.
Ask for a full rent roll with move-in dates, a ledger of deposits, utility bills for the last year and any repair invoices. Walk every unit if possible, and look closely at the boiler, roof, windows, porches and fire escapes. In a pre-1930 brick building, mortar repair and chimney work are common costs.
If the building needs major work before it can support a long-term loan, consider a bridge loan to buy and renovate first, then refinance into a DSCR loan once the units are leased at current rents. Plan that path with the rent stabilization rules in mind, and confirm with the city how renovated units are treated.
Parking and laundry are worth a close look too. Many older St. Paul buildings have little or no off-street parking, which tenants accept near transit but which can limit rents on blocks farther from the Green Line or major bus routes. Coin or card laundry in the basement adds a small income line, but most DSCR programs focus on unit rents. Count the laundry as a bonus, not as part of the ratio. Finally, ask whether the building has any history of tenant complaints or city enforcement, since that record can follow the property.
Send the address, price, rent roll, tax statement and Fire C of O status through the form below, or call (877) 298-1001. We will run the ratio at the leverage available for the building. Our investor loans are business-purpose loans on non-owner-occupied property. Also see our Minnesota 5-8 unit page.
For our DSCR program, 5-8 unit buildings are residential. Nine or more units is commercial.
It varies by program and is often lower than on 1-4 units. Ask for the current limit on your building. Some programs allow higher leverage on stronger buildings and borrowers, so ask before you assume the lower figure.
It limits how fast covered rents can rise, so the loan is sized on the current rent roll. Ask the seller for rent history so you can see where each unit stands under the ordinance.
Yes. Open correction orders can lead to holdbacks or required repairs before closing.
No. The loan qualifies on the building's combined rent.
Yes, if the units are legal and the building is permitted for that use.
Yes. LLC borrowers are standard, and you sign for the loan personally.
It does not enter the DSCR formula, but it affects your cash flow, so budget for it. Ask for a year of heating bills before you buy so you know the real cost.
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