2-4 unit DSCR loans
A 2-4 unit DSCR loan finances a duplex, triplex or fourplex based on the combined rent of all units compared with the building's full monthly payment. Leased units count at their lease or market rent, vacant units are often counted at market rent, and every unit must be investment property.
Who is this loan a good fit for?
- Investors buying or refinancing a duplex, triplex or fourplex that no owner will live in
- Owners with a mix of leased and vacant units
- Investors who want more rent per closing than a single-family rental provides
One building, one ratio
Add every unit's rent together for the top of the fraction. The bottom is one PITIA payment for the whole building. A single under-rented unit can pull the whole ratio down, so check each lease against market.
Business-purpose loans for non-owner-occupied investment property only. Debt Service Coverage Ratio is a mortgage broker: we arrange and shop financing from wholesale lenders, and every loan is subject to the lender's underwriting and approval.
How does this loan work?
List every unit
Write down each unit's current lease or estimated market rent. The total is the top of the ratio.
Build the building's payment
One loan payment plus the building's taxes, insurance and any association dues. Owner-paid utilities are a cost to budget, though they sit outside the ratio.
We shop the scenario
Programs differ on vacancy treatment, unit counts and property condition. We find the ones that fit your building.
Appraisal and close
The appraiser estimates value and market rent for each unit, the lender underwrites, and you close through the lender you choose.
What should you expect during underwriting?
- Leases for occupied units and possibly estoppel or rent confirmation on a purchase
- An appraisal with market rent for each unit
- Reserves, which some programs size to the larger payment on multi-unit property
- A certification that no owner or family member will occupy any unit
What should you check before applying?
- Living in one unit and renting the others is owner-occupied financing, which we do not arrange.
- Older buildings may need repairs that affect appraisal or eligibility; inspect carefully.
- Owner-paid utilities are common on small multifamily and are not part of the ratio.
What should you know about 2-4 unit dscr loans?
Can I live in one unit of a duplex with a DSCR loan?
No. DSCR loans we arrange are for non-owner-occupied investment property, so no owner or family member can live in any unit.
How are vacant units counted in the ratio?
Many programs use the appraiser's market rent for vacant units, though some are more cautious, particularly on a refinance. We tell you how each lender handles vacancies.
Is a fourplex financed with a residential or commercial DSCR?
Most programs treat 2-4 unit buildings with the residential method, gross rent over PITIA. Some apply expense factors, so confirm the method for each program.
Which guides should you read next?
Which other DSCR loan options are available?
DSCR purchase loans
Buy a rental with financing sized to what the property rents for, using appraisal market rent in the ratio.
DSCR cash-out refinance
Pull equity out of a rental you own, with the larger new loan still qualifying on the property's rent.
DSCR rate-and-term refinance
Replace a rental's current loan to change its pricing, term or structure without taking meaningful cash out.
Short-term rental DSCR loans
Finance a vacation or short-term rental where the ratio may use booking history, a market projection or long-term rent.
Investment property loans
An overview of business-purpose financing for non-owner-occupied rentals, and where a DSCR loan fits among the options.
Ready to discuss your rental property ratio?
Send the rent, the property and what you want to do. We take the scenario to multiple wholesale lenders, show how each one reads your DSCR, and explain the tradeoffs before you commit to anything.