Four units is the top of the 2-4 unit bracket, and that matters. A fourplex is still appraised like a small residential property, with comparable sales and a rent schedule, yet it produces four rents. For many investors it is the most financeable small multifamily building there is.
In short: LendingStreet finances fourplex rentals with DSCR loans that qualify on the combined rent from all four units, starting at $150,000 with no stated maximum. Purchases can go up to 80% LTV and cash-out up to 75%, LLC borrowers are standard and the minimum credit score is 620. If you are weighing a fourplex against a 5 to 8 unit building, the appraisal method and maximum leverage are the main differences.
A fourplex sits at the top of the 2-4 unit residential bracket. It is appraised with a small residential income property report, which leans on sales of other 2-4 unit properties plus a rent schedule, and that report is familiar to appraisers in most markets. Leverage on fourplexes is generally the same as on a duplex or triplex.
Four rents also spread risk. One vacancy takes out a quarter of the income rather than half, which is why lenders and investors both like fourplexes as a stepping stone between small rentals and apartment buildings.
Fourplexes show up almost everywhere: 1960s and 1970s two-story buildings in Sun Belt cities, brick four-family flats in St. Louis and other Midwestern cities, converted houses in older neighborhoods and newer fourplexes built as rentals in growing suburbs, sometimes in rows of several identical buildings. Rows like that can sometimes be financed together on a blanket portfolio loan.
LendingStreet treats 1 to 8 units as residential, so a 5-8 unit building is also financed with a DSCR loan. The differences show up in the appraisal and the terms. A five-unit and larger building leans more on the income approach and on fewer comparable sales, and maximum LTV is often lower and varies by program.
| Item | Fourplex (4 units) | 5 to 8 units |
|---|---|---|
| Classification | Residential, 2-4 unit bracket | Residential at LendingStreet |
| Appraisal | Small residential income report with rent schedule | More weight on the income approach |
| Purchase LTV | Up to 80% | Up to 80%, often lower; varies by program |
| Cash-out LTV | Up to 75% | Up to 75%, often lower |
| Comparable sales | Usually plentiful | Often thinner |
| Qualifies on | Rent from four units | Rent from five to eight units |
The DSCR is the combined rent from all four units divided by the full monthly payment: principal, interest, taxes, insurance and any association dues. Standard programs look for 1.0x or better, and sub-1.0 programs exist with lower leverage.
Underwriting compares the leases with the appraiser's market rent for each unit, often using the lower figure. Vacant units are usually counted at market rent, so a fourplex with one empty unit can still qualify if the other three leases and the market rent support the payment.
Because the ratio uses the full payment, taxes and insurance matter as much as the rate. A building in a high-tax city or a coastal insurance market can need a lower loan amount to reach 1.0x, even with strong rents.
This example is illustrative and not a quote. An investor buys a fourplex for $600,000. Each unit rents for $1,350, so combined rent is $5,400. Taxes are $8,400 a year and insurance is $4,800 a year.
At 80% LTV the loan is $480,000. On 30-year amortization, principal and interest is about $3,356. Adding $1,100 for taxes and insurance brings the payment to about $4,456, for a DSCR of about 1.21x.
For comparison, a six-unit building at the same rent per unit, priced at $870,000 with $12,000 in taxes and $7,200 in insurance, financed at a sample 75% LTV, would carry a loan of $652,500 and a payment of about $6,162, for a DSCR of about 1.31x. The larger building needs more cash down, $217,500 versus $120,000, because of the lower leverage assumed.
| Item | Fourplex | Six-unit |
|---|---|---|
| Price | $600,000 | $870,000 |
| Gross monthly rent | $5,400 | $8,100 |
| Sample LTV | 80% | 75% |
| Loan amount | $480,000 | $652,500 |
| Down payment | $120,000 | $217,500 |
| Total monthly payment | About $4,456 | About $6,162 |
| DSCR | About 1.21x | About 1.31x |
Get a landlord insurance quote for the whole building, including loss-of-rents coverage, before you set your offer. Taxes often change after a sale, so budget from your price rather than the seller's bill.
Many fourplexes have separate electric meters and a shared water meter. Owner-paid utilities do not enter the DSCR payment, but they reduce cash flow. Some owners bill water back to tenants; check whether local rules allow it before counting on that income.
If the fourplex is in an HOA, as some newer rows are, the dues go into the DSCR payment, and the association's leasing rules apply.
Purchases go up to 80% LTV, rate-and-term refinances up to 80% on some programs and cash-out up to 75%, with seasoning that varies by program. Investors who bought a fourplex with a bridge loan and renovated it often refinance into a DSCR loan once all four units are leased.
For a cash-out, the appraised value sets the ceiling and the rent sets what the payment can be, so the lower of the two results is your loan amount. Having all four units leased at market rents, a clean rent roll and a few months of deposits usually gives the strongest refinance. Our bridge-to-DSCR guide walks through timing if you are coming off a short-term loan.
Our investor loans are business-purpose loans on non-owner-occupied property, so all four units must be rented to tenants. Living in one unit while renting the other three is not eligible on these programs. LLC borrowers are standard, and you sign for the loan personally as the member.
These items keep a fourplex file moving. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet finances fourplex rentals with DSCR loans that qualify on the combined rent from all four units, from $150,000.
Residential. A fourplex is at the top of the 2-4 unit bracket. LendingStreet also treats 5 to 8 units as residential.
Up to 80% on a purchase and up to 75% on a cash-out refinance, as long as the rent covers the payment.
It depends on price, rents and your cash. Fourplexes often allow higher leverage and have more comparable sales; 5-8 unit buildings spread risk across more units but often need more down.
With a small residential income property report, using comparable 2-4 unit sales and a rent schedule for each unit.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so all four units have to be rented to tenants.
No. The loan qualifies on the fourplex's rent. You need a 620 or higher credit score and reserves.
Yes. LLC borrowers are standard, and many investors hold each building in its own entity. You sign for the loan personally as the member.
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