St. Paul is one of the few cities in the country with rent stabilization. If you are financing a 5-8 unit building there, how fast you can raise rents is a real part of the underwriting, not a footnote.
In short: LendingStreet offers jumbo DSCR loans of about $1.5M to $5M+ on high-value 1-8 unit rentals in Minnesota, qualified on the property's rent with no W-2s or tax returns. In Minnesota, jumbo balances usually come from homes in Edina, Wayzata and around Lake Minnetonka, Minneapolis and St. Paul multi-unit buildings, Rochester rentals near Mayo Clinic, and North Shore and Brainerd lakes cabins. Non-homestead classification, the deed and mortgage registry taxes and St. Paul rent stabilization shape these loans.
In the Twin Cities, Edina, Wayzata, Minnetonka, Orono and the Lake Minnetonka shoreline have the highest-value homes. Minneapolis neighborhoods such as Kenwood, Lowry Hill, Linden Hills and Lake Harriet have large older homes and small multi-unit buildings, and St. Paul's Summit Hill, Crocus Hill and Mac-Groveland have the same.
Rochester has steady demand from Mayo Clinic staff and visitors. Duluth and the North Shore, Stillwater on the St. Croix, and the Brainerd and Alexandria lakes areas have cabins and lake homes rented by the week in summer.
| Area | What a jumbo balance usually buys | Main underwriting issue |
|---|---|---|
| Edina and Lake Minnetonka | Large home on a 12-month lease | Taxes, few comparable leases |
| Minneapolis | 5-8 unit building or several duplexes | Rental license, combined rent |
| St. Paul | 5-8 unit building | Rent stabilization limits |
| North Shore and lakes | Cabin or lake home rented weekly | County STR permits, seasonal revenue |
St. Paul's rent stabilization ordinance limits annual rent increases on most existing units, with exceptions and an exemption for newer construction. If you are buying an older St. Paul building, underwrite on the rent you can actually charge, not on market rent.
Minneapolis does not have rent stabilization, but it requires rental licenses and inspections. In both cities, check license status before you close.
Minnesota taxes property by classification. An owner's home gets the homestead classification and a market value exclusion; a rental is classified as non-homestead residential and usually pays more on the same value. Use the investor classification when you budget.
Minnesota charges a state deed tax on the purchase price and a mortgage registry tax on the loan amount, and Hennepin and Ramsey counties add a small extra charge. On a jumbo loan the mortgage registry tax is a meaningful closing cost, so check it on your estimate.
Minnesota sees frequent hail, and insurers have raised premiums and deductibles. Winter brings ice dams and frozen pipes, and lake homes can face flooding and ice damage to docks and shorelines. Older Twin Cities homes may have aging boilers or wiring.
This example is illustrative and not a quote. An investor buys a 6-unit building in St. Paul for $1,500,000. Current rents average $2,050, for $12,300 a month. Taxes are budgeted at $1,900 a month and insurance at $600.
At 75% LTV the loan is $1,125,000 and estimated principal and interest is about $7,674, for a total monthly payment of about $10,174 and a DSCR of about 1.21x. At 70% LTV the loan is $1,050,000, estimated principal and interest is about $7,163, the payment is about $9,663 and DSCR is about 1.27x.
Because rent stabilization limits increases, this ratio is built on current rents. Do not assume a quick jump to market rent.
| Item | 75% LTV | 70% LTV |
|---|---|---|
| Purchase price | $1,500,000 | $1,500,000 |
| Loan amount | $1,125,000 | $1,050,000 |
| Estimated principal and interest | $7,674 | $7,163 |
| Property taxes | $1,900 | $1,900 |
| Insurance | $600 | $600 |
| Total monthly payment | $10,174 | $9,663 |
| Monthly rent | $12,300 | $12,300 |
| DSCR | About 1.21x | About 1.27x |
Minneapolis and St. Paul require rental licenses and short-term rental registration, and many suburbs have their own licensing. Cook County on the North Shore and counties in the Brainerd lakes area permit short-term rentals with rules of their own. Check before you buy.
Some programs qualify a short-term rental on projected revenue. Most Twin Cities jumbo files run on 12-month leases.
A jumbo DSCR loan is the same rent-based loan investors use on smaller rentals, sized for higher-value property. The lender divides the monthly rent by the full housing payment: principal, interest, taxes, insurance and any HOA dues. The standard minimum is 1.0x, and sub-1.0 programs exist for some files.
What changes with size is the level of review. On larger balances, maximum LTV is often lower than the headline limits, reserve requirements are often higher and some programs ask for a second valuation. Exact limits vary by program.
Sometimes the better answer is a different structure. A blanket portfolio loan combines five or more rentals, each 1-8 units, under one loan with portfolio pricing and release provisions, and some programs allow properties in more than one state. A 5-8 unit building qualifies on combined rent and often shows stronger coverage than a single home at the same price.
If the ratio is close, a larger down payment or a sub-1.0 DSCR program may work. For 9+ unit buildings, see our commercial loans page.
These documents move a large file along:
Our investor loans are business-purpose loans on non-owner-occupied property. Tell us the address, price, rent and how much you want to borrow; the team will check coverage on realistic taxes and insurance and come back with options. Get a quote with the form below or call (877) 298-1001. For broader context, see our Minnesota DSCR loans page.
It can. The ordinance limits annual rent increases on most existing units, so underwriting should use current rents rather than assumed increases.
A state tax on the loan amount, paid when the mortgage is recorded. On a jumbo loan it is a meaningful closing cost.
Minnesota classifies rentals as non-homestead residential, which usually pays more than a homestead on the same value.
DSCR programs have no stated maximum. Jumbo loans generally run from about $1.5M to $5M+, and larger balances get more review and often a lower maximum LTV.
Yes. Underwriting uses the property's rent instead of W-2s or tax returns. You will still need a 620 or higher credit score and proof of funds.
Yes. Cash-out is available up to 75% LTV, often lower at the top end, as long as the ratio works at the new payment.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so the property must be a rental.
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