A duplex is one of the most efficient rentals to finance: one roof, one lot, one closing and two rent checks. With a DSCR loan, both units' rent does the qualifying, not your tax returns.
In short: LendingStreet finances duplex rentals with DSCR loans that qualify on the combined rent from both units, starting at $150,000. Purchases go up to 80% LTV and cash-out up to 75%, LLC borrowers are standard and the minimum credit score is 620. These are business-purpose loans for investors, so the duplex has to be fully rented, not a home where you live in one side.
A duplex is a single property with two separate dwelling units, side by side or stacked. A DSCR loan can finance a purchase, a rate-and-term refinance or a cash-out refinance. The loan qualifies on the property, so your personal income and debt-to-income ratio are not part of the decision.
Duplexes come in many forms: up-and-down two-flats in older Midwestern and Northeastern cities, side-by-side units in the South and Southwest, and newer duplexes built as rentals in growing suburbs. All can qualify if both units are rented to tenants.
For many investors a duplex is the first step beyond single-family rentals. The purchase price per unit is often lower than for two separate houses, and if one side turns over, the other side keeps paying. That second rent check is also what makes the DSCR math easier on a duplex than on a single house at the same price.
Our investor loans are business-purpose loans on non-owner-occupied property. Living in one unit and renting the other is not eligible on these programs; that is a different kind of loan.
If you lived in a duplex and have since moved out, the property can qualify once both units are rented as investment property. Expect the lender to ask where you live now and to confirm through the file that neither unit is your home.
The same rule applies to family members: a business-purpose DSCR loan is for a property leased at market terms to tenants. If a relative will live in one side rent-free, talk to us before applying.
The DSCR is the combined monthly rent from both units divided by the full payment: principal, interest, taxes, insurance and any HOA dues. Standard programs want 1.0x or better.
Underwriting uses the leases in place and the appraiser's market rent for each unit, often taking the lower of the two. A vacant unit is usually counted at market rent, and on a purchase where the seller's leases are below market, the in-place rents may be what count until leases renew.
Because two units carry the payment, a duplex can often reach 1.0x at higher leverage than a single-family rental at the same price. That is one reason duplexes remain popular in markets where house prices have outrun rents.
Duplexes are usually appraised on a small residential income property report, which includes a rent schedule comparing each unit's rent with comparable rentals. The appraiser values the property mostly from sales of similar 2-4 unit properties.
If your rents are below market, the rent schedule may support a higher figure, but the loan is sized on the rent the program allows. Photos, a list of recent updates and copies of the leases help the appraiser describe each unit accurately.
Condition matters on both sides. If one unit is dated or unfinished, the appraiser may note it and the market rent for that unit may come in lower.
On a purchase, the loan can go up to 80% LTV. A rate-and-term refinance can go up to 80% on some programs, and a cash-out refinance up to 75%. Cash-out seasoning varies by program.
| Loan type | Max LTV | Notes |
|---|---|---|
| Purchase | Up to 80% | Rent from both units qualifies |
| Rate-and-term refinance | Up to 80% on some programs | Pays off the existing loan |
| Cash-out refinance | Up to 75% | Seasoning varies by program |
This example is illustrative and not a quote. An investor buys a duplex for $340,000. One side rents for $1,450 and the other for $1,350, so combined rent is $2,800. Taxes are $4,800 a year and insurance is $2,400.
At 80% LTV the loan is $272,000. On 30-year amortization, principal and interest is about $1,902. Adding $600 for taxes and insurance brings the payment to about $2,502, for a DSCR of about 1.12x. If the smaller unit sat vacant and was counted at a market rent of $1,300, combined rent would be $2,750 and the ratio would be about 1.10x.
| Item | Amount |
|---|---|
| Purchase price | $340,000 |
| Loan at 80% LTV | $272,000 |
| Combined monthly rent | $2,800 |
| Principal and interest | About $1,902 |
| Taxes and insurance | About $600 |
| Total payment | About $2,502 |
| DSCR | About 1.12x |
Separate meters for each unit mean tenants pay their own utilities, which helps cash flow. Shared meters mean the owner may pay water or heat. Neither is in the DSCR payment, but both affect returns.
Insurance on a duplex is a landlord policy covering the whole building and both units, usually with loss-of-rents coverage. Get a quote before you set your offer, since a higher premium lowers the ratio dollar for dollar.
Property taxes can change after a sale, especially if the seller lived in one side and had a homestead exemption. Budget taxes as a rental, not from the seller's bill. If the duplex is part of an HOA, the dues go into the DSCR payment too.
LLC borrowers are standard. The LLC holds title and you sign for the loan personally as the member. If you already own the duplex in your own name, deeding it into an LLC at a refinance is common; ask your attorney about the transfer. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet finances duplex rentals with DSCR loans that qualify on the combined rent from both units.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so both units must be rented.
Up to 80% on a purchase, up to 80% on a rate-and-term refinance on some programs and up to 75% on a cash-out refinance. The combined rent still has to cover the payment at the program minimum.
Usually on a small residential income property report, which values the property from comparable 2-4 unit sales and includes a rent schedule estimating market rent for each unit.
It is usually counted at the appraiser's market rent. Some programs use the lower of actual and market rent, so a signed lease on the vacant side before closing can help.
No. The loan qualifies on the duplex's rent. You still need a 620 or higher credit score, reserves and a clean title.
Yes. LLC borrowers are standard, and you sign for the loan personally as the member.
Often, yes. Two rents carrying one payment usually produce a stronger ratio than a single house at the same price, though taxes and insurance still have to fit.
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