In Washington, DC, buying a five to eight unit building is as much a legal process as a financing one. Tenant purchase rights under TOPA, rent control on older buildings and a two-part transfer tax all need to be in your plan before you set a closing date.
In short: LendingStreet finances 5 to 8 unit rental buildings in Washington, DC with DSCR loans that qualify on the building's rent, with no W-2s or tax returns and LLC borrowers standard. Loans start at $150,000 with no stated maximum and the standard minimum DSCR is 1.0x. In DC, plan for TOPA timelines, assume rent control applies to most older buildings and size the loan on the rents you can actually charge.
Columbia Heights, Petworth, Mount Pleasant and Brightwood have small brick apartment buildings from the 1920s through the 1950s, often six or eight units on three floors. Shaw, Bloomingdale and Capitol Hill have large rowhouses converted into several units. East of the river, Congress Heights and Anacostia have garden-style buildings at lower prices per unit.
Renters include federal workers, contractors, students at Howard, Georgetown, GW and Catholic University, and hospital staff.
Many of these buildings were built before the mid-1970s, which matters for rent control.
| Area | Typical 5-8 unit stock | What to check |
|---|---|---|
| Columbia Heights, Petworth, Mount Pleasant | 1920s to 1950s brick walk-ups | Rent control, TOPA |
| Shaw, Bloomingdale, Capitol Hill | Rowhouse conversions | Certificate of occupancy, unit count |
| Brightwood, Takoma | Small brick apartment buildings | Registered rents |
| Congress Heights, Anacostia | Garden-style buildings | Condition, voucher leases |
The ratio is simple: total monthly rent divided by the monthly payment, where the payment includes principal, interest, taxes, insurance and any HOA dues. A 1.0x ratio means the rent exactly covers the payment, which is the standard minimum. Programs below 1.0x exist for buildings with a thin margin.
Five to eight units still counts as residential under our programs, which is why you can finance one with no W-2s or tax returns and an LLC as the borrower. Expect leverage that varies by program: up to 80% LTV on a purchase on some programs, often less on 5-8 units and larger balances, and up to 75% on a cash-out. Loans start at $150,000 with no stated maximum and a 620 minimum credit score. Nine units and up is a commercial loan.
Under rent control, the rent you can charge is tied to the registered rent and allowed increases, not to market. We underwrite the leases in place, so do not assume you can raise rents to market after closing.
DC charges both a deed recordation tax and a deed transfer tax, and the rates step up above a value threshold that nearly any 5-8 unit building will clear. Buyers customarily pay recordation and sellers pay transfer, but contracts can change that. Together they make DC closing costs higher than in many nearby jurisdictions.
DC property taxes on residential buildings are moderate compared with Maryland and much of the region, and the homestead deduction only applies to owner-occupants. Budget on the current assessment.
The Tenant Opportunity to Purchase Act gives tenants the right to buy the building, or to assign that right, before an owner sells to someone else. For a building with five or more units, tenants can form an association and the statutory timeline can add months to a sale. Build the TOPA process into your contract and closing date.
DC rent control covers many rental buildings built before 1976. The small landlord exemption applies to owners of four or fewer rental units, so an investor buying a 5-8 unit building is generally not exempt. Allowed annual increases are limited, and rents must be registered with the city.
Every rental needs a basic business license, and many multi-unit buildings also need a certificate of occupancy for the number of units.
This example is illustrative and not a quote. An investor buys an 8-unit 1930s brick building in Petworth for $2,600,000. The rent-controlled units rent for about $2,000 each, or $16,000 a month. Taxes are budgeted at $1,840 a month and insurance at $750.
At 70% LTV, the loan is $1,820,000. On a 30-year fixed, principal and interest is about $12,416, the full payment with taxes and insurance is about $15,006, and DSCR is about 1.07x. At 65% LTV, the loan is $1,690,000, principal and interest is about $11,529, the payment is about $14,119 and DSCR is about 1.13x.
Both loans clear 1.0x, but the margin at 70% is thin, and rent control limits how fast it can improve. The 65% loan needs about $130,000 more at closing and gives more cushion.
| Item | 70% LTV | 65% LTV |
|---|---|---|
| Gross monthly rent | $16,000 | $16,000 |
| Loan amount | $1,820,000 | $1,690,000 |
| Principal and interest | $12,416 | $11,529 |
| Property taxes | $1,840 | $1,840 |
| Insurance | $750 | $750 |
| Total monthly payment | $15,006 | $14,119 |
| DSCR | About 1.07x | About 1.13x |
Older DC apartment buildings often have central boilers, original wiring and limited parking. Rowhouse conversions sometimes added units without the right permits, so match the unit count to the certificate of occupancy.
Have these ready when you request a quote, and the review moves quickly.
LendingStreet finances business-purpose DSCR loans on non-owner-occupied rentals throughout the District and nearby Maryland and Northern Virginia. Our investor loans are business-purpose loans on non-owner-occupied property.
Use the form below or call (877) 298-1001 with the address, price, rent roll and how much you want to borrow. We check the ratio at more than one loan amount, on the taxes and insurance you will actually pay, and send back clear options. Buildings with vacancies or deferred work may fit a short-term bridge loan before a DSCR refinance.
It affects timing more than the loan itself. Tenants must get notice and a chance to buy. On 5-8 unit buildings the process can take months, so set your contract dates and rate expectations accordingly.
If it was built before 1976 and you own more than four rental units, it likely is. Check the building's registration with the city and confirm with a DC real estate attorney.
By custom the buyer pays recordation and the seller pays transfer, but the contract controls. Both are charged at higher rates above the residential value threshold.
Not with us. Our residential DSCR programs cover 1 to 8 units, so a 8-unit building qualifies on rent like any other rental. Nine units and up is financed as commercial.
Up to 80% on a purchase on some programs and up to 75% on a cash-out, but 5-8 unit buildings often carry lower maximums. The exact figure varies by program and by how strongly the rent covers the payment.
Yes. Closing in an LLC is standard. The members typically sign for the loan personally, and the operating agreement and formation documents go in the file.
Yes, up to 75% LTV on cash-out, depending on the program, as long as the building's rent covers the new payment at the program minimum. How long you need to own it first varies by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property. Every unit should be rented to tenants.
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