Austin has added a large wave of new apartments in recent years, and that new supply is now competing with every older building in town. For a 9+ unit loan, the question is not what rents were at the peak. It is what your building collects today, after concessions, against the new product down the street.
In short: LendingStreet makes commercial multifamily loans on 9+ unit apartment buildings across the Austin metro, for stabilized and value-add properties, with custom terms up to $5M+ and up to 75% LTV on acquisitions. Loans are sized on NOI from the rent roll and trailing operating statements, tested against DSCR and LTV. Buildings with 1-8 units are financed as residential rentals instead.
Once a building has nine or more units, it is underwritten as a commercial property: on the building's income and expenses rather than on a single market rent estimate. If you are looking at a fourplex in Hyde Park or a 6-unit building in South Austin, start with our Austin 5-8 unit DSCR or 2-4 unit rental pages instead.
The line matters for more than paperwork. A commercial multifamily loan looks at the whole operation: payroll, utilities, turnover, management and reserves. A well-run 12-unit building with clean books can size better than a larger building with messy records, because we can trust the numbers we are underwriting.
Much of the 9+ unit stock that smaller investors buy in Austin was built in the 1970s and 1980s: two- and three-story garden complexes along East Riverside, North Lamar, Rundberg, Oltorf and parts of South Austin. West Campus, near the University of Texas, has a dense mix of older walk-ups and newer student-oriented buildings, which come with their own leasing calendar.
Newer product is concentrated downtown, around the Domain, in Mueller and across the suburbs from Round Rock and Pflugerville to Kyle and Buda. When those newer buildings offer concessions, older properties nearby often feel pressure on rents and occupancy.
| Building type | Common Austin locations | Underwriting focus |
|---|---|---|
| 1970s-80s garden complex | East Riverside, North Lamar, Oltorf, South Austin | Deferred maintenance, roofs, plumbing, electrical |
| Older walk-up near campus | West Campus, Hyde Park edges | Lease calendar, turnover, pre-leasing |
| 1990s-2000s suburban complex | Round Rock, Pflugerville, Cedar Park | Competition from newer suburban supply |
| Newer small infill building | East Austin, South Lamar, Burnet Road | Tax reset after sale, concessions in place |
We start with the rent roll and the trailing 12-month operating statement, then build NOI from actual collections, not asking rents. Concessions, bad debt, vacancy and loss to lease all come off the top. Expenses include property taxes, insurance, payroll, repairs, utilities the owner pays, management and replacement reserves.
The loan is the lower of what the LTV limit allows, up to 75% on acquisitions, and what the NOI supports at the required DSCR. Maximum leverage varies by program and balance.
We also compare the trailing statements with the rent roll. If the rent roll shows higher rents than the T-12 collected, we want to understand why: recent increases, new leases with concessions, or units that are leased but not paying. In a market with heavy concessions, net effective rent is the figure that counts.
This example is illustrative and not a quote. An investor is buying a 32-unit 1980s complex in South Austin at an assumed value of $3,200,000. Average in-place rent is $1,250 a month, for gross potential rent of $480,000 a year. Underwriting takes 8% off for vacancy, concessions and credit loss and adds $19,200 in laundry, fees and utility reimbursements.
After expenses of $201,600, NOI is $259,200. At 75% LTV the loan is $2,400,000, with estimated annual debt service of $208,168 and a DSCR of about 1.25x. The tax line is budgeted on the purchase price, not the seller's bill.
| Line | Amount |
|---|---|
| Gross potential rent | $480,000 |
| Vacancy, concessions and credit loss (assumed) | -$38,400 |
| Other income (assumed) | $19,200 |
| Effective gross income | $460,800 |
| Property taxes (assumed) | -$76,000 |
| Insurance (assumed) | -$28,000 |
| Repairs, payroll, utilities and management (assumed) | -$88,000 |
| Replacement reserves (assumed) | -$9,600 |
| Net operating income (NOI) | $259,200 |
| Value (assumed) | $3,200,000 |
| Loan amount at 75% LTV | $2,400,000 |
| Estimated annual debt service | $208,168 |
| DSCR | 1.25x |
A stabilized building has steady occupancy, collections that match the rent roll and no major work planned. That fits a permanent loan sized on current NOI.
A value-add building has a plan: renovate units as they turn, fix deferred maintenance, add utility billing or bring management up to standard. If the in-place NOI does not yet support the debt you want, a multifamily bridge loan can fund the purchase and renovation, with an exit to permanent financing once the higher rents are in place. Be realistic about rent premiums in a market where new buildings may be offering free rent. A modest, well-documented renovation plan is easier to finance than an aggressive one.
Texas has no state income tax, and property taxes are a major apartment expense. The Travis, Williamson or Hays central appraisal district sets values each year, and a sale often pushes the value toward the price. Owners can protest each year, but underwrite on the realistic post-sale figure and confirm with the district.
Insurance on older garden complexes can be costly, especially with older roofs and the hail risk common in Central Texas. Some complexes near creeks sit in mapped floodplains, so get a flood determination early. Older buildings may also need upgrades that an insurer asks for before it will bind coverage.
Commercial multifamily loans take longer than residential loans. Expect a full valuation, rent roll review, and often environmental and property condition reports. Because Texas is a non-disclosure state, sale comps can be harder to confirm, so share what you know.
Our investor loans are business-purpose loans on non-owner-occupied property. Borrower experience, liquidity and the property's operating history all matter. Send the rent roll and T-12 through the form below or call (877) 298-1001, and we will run the NOI and coverage before you commit.
Nine or more. Buildings with 1-8 units are financed as residential rentals through our DSCR programs.
Yes. We size on what the building collects, so free rent and other concessions reduce the income we count.
Yes. If current NOI will not support a permanent loan, a bridge loan can cover the purchase and renovation, then exit to permanent financing.
A current rent roll, trailing 12-month and prior-year operating statements, the purchase contract, a tax bill, an insurance quote and entity documents.
We can review investor-owned apartment buildings near campus. Leasing calendars, turnover and pre-leasing get a closer look.
Up to 75% LTV on acquisitions, with the final amount set by whichever is lower: the LTV limit or what NOI supports at the required DSCR.
In Texas, appraisal districts reappraise each year and a sale often moves the value toward the price. Confirm current values and rates with the appraisal district.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
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Properties with 5+ units are commercial by definition, so they fall outside Fannie/Freddie residential programs. But at 5-20 units the loan is usually too small for institutional multifamily desks, whose minimums and timelines are built for 50+ unit assets. The result is a financing gap: too big for residential, too small for institutional.
Through DSCR-based and bridge capital sources that underwrite to the property's net operating income rather than agency checklists. Typical structures: purchase or refinance at up to 75% LTV, 5-20 units, $200K-$20M, with bridge-to-perm available for value-add and lease-up plays.
Stabilized small multifamily DSCR loans typically close in 14-21 days. Bridge structures for value-add acquisitions can close in 5-10 days, then refinance into permanent DSCR financing after stabilization.
No. These programs underwrite the property's income (NOI / DSCR), not your tax returns. LLC borrowers are standard, and there is no W2 requirement.
Mixed-use with a residential majority (for example, apartments over retail) can be placed through commercial and mixed-use capital sources through the same LendingStreet application, with custom terms up to $5M+.