What is a 5-8 unit DSCR loan?

A 5-8 unit DSCR loan is a mortgage for small commercial multi-family properties containing five to eight individual rental units. It's a type of DSCR (Debt Service Coverage Ratio) loan, meaning you qualify based on the property's rental income rather than your personal income.

Why do 5-8 unit properties require a specific type of DSCR loan?

Properties with five or more units are generally classified as commercial real estate, whereas 1-4 unit properties are considered residential. This distinction means they fall under different lending guidelines. Our 5-8 unit DSCR program is specifically designed to finance these small commercial assets.

Can I use a DSCR loan for a mixed-use property with 5-8 units?

Yes, many 5-8 unit DSCR loan programs, including ours, allow for mixed-use properties, where there might be a combination of residential apartments and commercial storefronts. The loan will still be underwritten based on the total income generated by all units.

5-8 Unit DSCR Loans for Real Estate Investors to Finance Small Commercial Properties

How 5-8 Unit DSCR Loans Work

Finance Small Commercial

Specifically designed for 5-8 unit multi-family and mixed-use properties, which are classified as commercial.

Qualify on DSCR

The property's rental income must be able to cover the mortgage payment, no personal income required.

Scale Your Portfolio

An ideal tool for investors ready to move from residential 1-4 unit properties into the small commercial space.

5-8 Unit DSCR Mortgage Loan Highlights

Scaling Your Real Estate Portfolio: 5-8 Unit DSCR Loans — Scale your portfolio with 5-8 unit DSCR loans.

This Non-QM mortgage product uses the Net Operating Income (Cash Flow) from the subject investment property to qualify the loan. It does not require full documentation for the owner of the property or LLC; typically rates are set based on the FICO score of the primary borrower, but employment and income documentation are not required.

DSCR Calculation: DSCR = Net Operating Income/PITIA (Principal + Interest + Taxes + Insurance + Association Fees).
Rental Income: The primary focus is the rental income generated by the property. We have programs with DSCR ratios down to 0.00, though the best terms are for properties with a DSCR of 1.5 or above.
Business Purpose Loan: DSCR loans are business purpose loans, eligible to close in an entity (like an LLC) for added protection and tax advantages.

Small Commercial DSCR Programs Available:

Purchase / Refinance / Cash Out Refinance
Up to 75% LTV for Purchase & Cash Out
30-Year Fixed & 40-Year Interest-Only Terms
Up to $5M Loan Amount
No Personal Income or Employment Used for Qualification
660+ Credit Minimum
5-8 Unit Properties & Mixed-Use Allowed