A triplex is three rents on one parcel, and in many older cities it is the classic investor building: the three-decker, the stacked flat, the house with a basement and attic unit. A DSCR loan qualifies it on those three rents instead of your personal income.
In short: LendingStreet finances triplex rentals with DSCR loans that qualify on the combined rent from all three 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 no W-2s or tax returns are needed. The building has to be investment property, with all three units rented to tenants.
A triplex is one property with three separate dwelling units, each with its own kitchen, bath and entrance. Common versions include the New England triple-decker, three-flat buildings in Chicago and other Midwestern cities, converted Victorians and newer side-by-side three-unit buildings.
A DSCR loan can finance a purchase, a rate-and-term refinance or a cash-out refinance. Because triplexes fall in the 2-4 unit bracket, they are appraised and underwritten much like a duplex or fourplex, with the rent from all three units doing the qualifying.
Triplexes are concentrated in older cities. New England has thousands of triple-deckers in places like Worcester, Providence, Hartford and the Boston area. Chicago, Milwaukee and other Midwestern cities have brick three-flats. Many Southern and Western cities have fewer purpose-built triplexes, so the three-unit properties there are more often converted houses or small infill buildings.
Where triplexes are common, appraisers have plenty of comparable sales and market rent data. Where they are rare, the appraiser may lean on duplex and fourplex sales, so expect more adjustments in the report.
The appraiser completes a small residential income property report with a rent schedule that estimates market rent for each unit, using comparable rentals nearby. In a triplex the units are often different sizes: a large first-floor unit, a middle unit and a smaller top or basement unit. Each gets its own market rent estimate.
Underwriting compares those estimates with the leases in place and, on many programs, uses the lower figure for each unit. Keep the leases, a simple rent roll and recent rent deposits ready so the in-place rents are easy to verify.
Legality matters too. If one of the three units was added without permits, such as a finished basement or attic apartment, the appraiser may not count it as a legal unit, and the property could be valued and underwritten as a duplex.
A vacant unit is usually counted at the appraiser's market rent rather than at zero, which is one advantage of DSCR underwriting. But when the program uses the lower of actual and market rent, a unit leased below market will count at its lease rent.
If more than one unit is vacant or a unit needs renovation before it can be rented, a bridge loan first and a refinance into a DSCR loan after lease-up may be the cleaner path.
A triplex needs a landlord policy covering the whole building, usually with loss-of-rents coverage. Older three-deckers and three-flats draw questions about wiring, heating systems, porches and fire separation between floors. A current quote is the number that goes into the DSCR payment.
Utilities vary a lot. Many older triplexes have separate electric meters but a shared boiler or water meter, which the owner pays. Those costs are not in the DSCR payment, but they affect your cash flow, so know them before you buy.
This example is illustrative and not a quote. An investor buys a triplex for $450,000. Each unit rents for $1,300 a month, so combined rent is $3,900. Taxes are $6,600 a year and insurance is $3,600 a year.
At 80% LTV the loan is $360,000. On 30-year amortization, principal and interest is about $2,517. Adding $850 for taxes and insurance brings the payment to about $3,367, for a DSCR of about 1.16x. If the top unit were vacant and the appraiser's market rent for it were $1,200, qualifying rent would be $3,800 and the ratio would be about 1.13x, still above 1.0x.
| Item | All three leased | Top unit vacant |
|---|---|---|
| Qualifying monthly rent | $3,900 | $3,800 |
| Loan at 80% LTV | $360,000 | $360,000 |
| Principal and interest | About $2,517 | About $2,517 |
| Taxes and insurance | About $850 | About $850 |
| Total payment | About $3,367 | About $3,367 |
| DSCR | About 1.16x | About 1.13x |
On a purchase, the loan can reach 80% LTV. Rate-and-term refinances go up to 80% on some programs, and cash-out refinances up to 75%, with seasoning that varies by program. If you bought the triplex with cash or a short-term loan and improved it, a cash-out refinance can return part of that capital once the units are leased.
On a refinance, the appraisal sets the value and the leases set the rent, so finishing renovations, getting all three units leased at market rents and having a few months of rent deposits in hand before you apply usually produces the best result. If you are refinancing a loan that is about to mature, start early so the appraisal is not rushed.
LLC borrowers are standard on our DSCR programs, and many investors keep each building in its own entity or in a holding LLC. You sign for the loan personally as the member. Our investor loans are business-purpose loans on non-owner-occupied property, so the triplex cannot be your home, including living in one unit while renting the other two.
These items keep a triplex file moving from appraisal through closing. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet finances triplex rentals with DSCR loans that qualify on the combined rent from all three units, starting at $150,000.
Yes. A triplex is in the 2-4 unit residential bracket and is appraised with a small residential income property report and rent schedule.
If a unit was added without permits, the appraiser may not count it, and the property could be treated as a duplex. Check permit history before you buy.
Usually at the appraiser's market rent. Some programs use the lower of actual and market rent for leased units.
No. Our investor loans are business-purpose loans on non-owner-occupied property, so all three units must be rented.
Up to 80% on a purchase and up to 75% on a cash-out refinance, as long as the rent covers the payment at the program minimum.
No. The loan qualifies on the triplex's rent. You need a 620 or higher credit score and reserves, and LLC borrowers are standard.
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