Vermont's small cities have a supply of older multifamily buildings: large Victorians split into apartments in Burlington and Winooski, and brick and frame blocks in Rutland, Barre and St. Albans. Rental demand is tight and new supply is scarce.
In short: LendingStreet makes DSCR loans on 5, 6, 7 and 8 unit residential rentals in Vermont, 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 Vermont, the property transfer tax at purchase, heating costs and flood exposure in river valleys are the items to check.
Burlington has small buildings in the Old North End, the Hill section near the University of Vermont and downtown, many of them large wood-frame houses split into five to eight units. Winooski, across the river, has similar stock and mill-era buildings. South Burlington and Essex have fewer.
Rutland, Barre, Montpelier, St. Albans and Brattleboro have older brick and frame buildings near their downtowns, at prices per unit well below Burlington's. Many have long-term tenants.
| Area | Typical buildings | What to check |
|---|---|---|
| Burlington, Winooski | Victorian conversions | Heat, fire code, student turnover |
| Rutland, Barre, Montpelier | Brick and frame blocks | Flood history, older systems |
| St. Albans, Brattleboro | Older multifamily | Deferred maintenance |
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 |
Vermont winters are long and cold, and many older buildings have owner-paid heat through oil or gas boilers. Ask for a year of fuel bills, and have the heating system inspected.
The July 2023 floods damaged buildings in Montpelier, Barre and other river towns, and flooding hit again in 2024. Check the flood map and ask for flood history. If flood coverage is required, the premium counts in the ratio.
Vermont charges a property transfer tax at purchase, paid by the buyer, with lower rates reserved for buyers who will live in the home. Investors pay the standard rate. On a 5 to 8 unit building this is a real closing cost, so ask your title company or attorney for the figure.
Property taxes in Vermont are relatively high, and the education portion is set through a statewide system with different rates for homesteads and non-homestead property. Rentals are non-homestead. Use the current bill and the non-homestead rate.
This example is illustrative and not a quote. An investor buys a Burlington Old North End six-unit building for $1,050,000. Each unit rents for about $1,700 a month, so gross rent is $10,200. Property taxes are budgeted at $1,350 a month and insurance at $400. The owner also pays about $500 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 $787,500. On 30-year amortization, principal and interest is about $5,506, so the payment with taxes and insurance is about $7,256 and the DSCR is about 1.41x.
That clears the 1.0x standard minimum. After the owner-paid costs, about $2,444 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 | $1,050,000 |
| Gross monthly rent | $10,200 |
| Loan amount | $787,500 |
| Principal and interest | $5,506 |
| Property taxes | $1,350 |
| Insurance | $400 |
| Monthly payment (PITI) | $7,256 |
| DSCR | About 1.41x |
Vermont's Residential Rental Agreements Act sets rules for deposits, notices and habitability. Burlington has a rental registration and inspection program, and the city has considered other tenant rules. Check current requirements.
Buildings near UVM rent on academic-year leases. A rent roll with lease dates helps show stable income.
Vermont has a tight rental market, with low vacancy in Burlington and limited new construction. Demand comes from UVM, the University of Vermont Medical Center, state government and employers in Chittenden County.
Higher taxes and heating costs mean the ratio can still be tight. Use the non-homestead tax rate and a realistic insurance quote.
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.
The buyer pays. Investors pay the standard rate, not the lower rate for buyers who will live in the home.
Yes. Rentals are non-homestead property and pay the non-homestead education rate.
If the building is in a mapped flood zone, flood insurance is generally required. Recent floods showed risk outside those zones too.
Yes. Burlington has a rental registration and inspection program.
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.
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.
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