DSCR Loans for 5–10 Unit Properties — Qualify on the Property's Income, Not Yours

DSCR (Debt Service Coverage Ratio) = Gross Monthly Rent ÷ Monthly PITIA (principal, interest, taxes, insurance, HOA). A ratio of 1.0 means rent exactly covers the debt. This 5–10 unit program qualifies on ratios as low as 1.1x.

The property's rent roll, current lease agreements, and three months of rental receipts — plus a Form 71A appraisal. No tax returns, W-2s, or pay stubs are required.

Yes. Cash-out refinances are available up to 65% LTV, with as much as $500,000 in cash out. Rate-and-term refinances go up to 70% LTV, and purchases up to 75% LTV.

Yes — up to a maximum of 2 vacant units at closing. The Form 71A appraisal is used to establish market rent for vacant units so they can be included in the income analysis.

Because qualification uses the current rent roll and leases rather than tax returns, a property whose income has just stabilized — and isn't yet reflected on your latest return — can still qualify on the rents it actually generates today.

Yes. This program requires title to be held in an LLC and is limited to experienced investors.

Leased units are counted at the lower of the lease amount or the estimated market rent from the appraisal. Vacant units are counted at 75% of market rent, up to a maximum of two vacancies. If a management fee is reflected in the appraisal or loan file, qualifying rent is reduced by that amount — investors who self-manage may be able to have it waived with documentation. Short-term rental income is not eligible, and all units must be occupied on rate-and-term and cash-out refinances.

Yes. The property is investment-occupancy only, but a family member may occupy one unit. That unit's rent can't be counted toward qualifying, and the relative can't hold ownership in the property.

The qualifying score is the middle of three or the lower of two, using the highest-scoring borrower or guarantor, with a 680 minimum. Housing history must show no 30-day lates in the last 12 months and no more than one in 24 months. We also look for two tradelines reporting for 24 months with activity in the last 12, or three reporting for 12 months with recent activity.

Sixty days of asset verification is required. Gift funds are not eligible on this program. Reserve requirements vary by loan size and LTV, and cash-out proceeds may be used to satisfy reserves.

The Form 71A appraisal includes a rent roll and an income & expense statement. Loans above $1.5 million generally require a second full appraisal. The property must have no fair or poor condition ratings, no health or safety concerns, no structural deferred maintenance (foundation, roof, electrical, plumbing), and no environmental issues. Minimum unit size is 500 square feet, and rural properties up to 2 acres may be eligible.

Cash-out proceeds must be used for a business purpose. On rate-and-term refinances, cash back to the borrower is capped at the lesser of 2% of the loan amount or $5,000.

That falls under our standard 1–4 unit DSCR investor program, which has different pricing and generally lower reserve requirements. Our DSCR calculator below models both — from a 1.1x minimum on 5–10 unit properties down to 0.75x on 1–4 unit deals.

No. Unlike small-balance agency loans (Fannie Mae and Freddie Mac small-balance programs) and most bank portfolio loans, this program has no quarterly or annual financial-statement requirements, no ongoing rent-roll filings, and no financial covenants to monitor. Once the loan closes, you manage the property without recurring lender paperwork.

No balloon and no adjustable rate. You choose a 30-year fully amortizing fixed rate, or a 40-year fixed structured as 10 years interest-only followed by 30 years fully amortizing — with the same fixed rate locked for the entire 40-year term. Bank and agency small-balance loans often carry 5-, 7-, or 10-year terms with a balloon or a rate reset; a fixed 30- or 40-year term removes that refinance risk and locks your payment structure for the life of the loan.

No. Unlike most bank portfolio loans, there's no depository relationship required — you don't have to move operating accounts, reserves, or deposits to qualify or to keep your rate. You can keep banking with your existing bank or credit union.