Where this financing fits
A 5+ unit apartment building or a property with both residential and commercial space may not fit a standard residential mortgage. Smaller properties can still have financing options through multifamily small-loan programs, DSCR investor programs, portfolio lenders or commercial channels.
- 5+ unit residential rental properties
- 2-8 unit mixed-use properties with residential and commercial tenants
- Acquisition, rate-and-term refinance or cash-out refinance goals
- Stabilized income, leases and occupancy history
- Experienced-investor and liquidity requirements
How lenders may evaluate income
The income review usually starts with leases, rent rolls, operating history, market rent support and the proposed mortgage payment. Some DSCR-style programs focus on property cash flow, while agency or commercial multifamily paths may review net operating income, occupancy, expenses, reserves and sponsor strength.
Mixed-use details matter
Commercial space can change the loan path. Lenders may review the percentage of commercial area, tenant type, lease terms, business use, zoning, insurance, environmental screening and whether the residential portion remains the primary use under the selected program.
- Residential and commercial unit mix
- Commercial square footage or gross leasable area
- Executed commercial leases
- Permitted use and property condition
- Environmental, insurance and title considerations
Prepare the property package
A strong submission usually includes a rent roll, leases, income and expense information, property photos or appraisal support, insurance details, entity records, purchase contract or payoff information and asset statements. The earlier these items are organized, the easier it is to compare eligible lender paths.
Common questions
Frequently asked questions
What is a small-balance multifamily loan?
It is financing for a smaller multifamily property, commonly a 5+ unit rental property, using lender-specific multifamily, portfolio, DSCR or commercial guidelines.
Can mixed-use properties qualify for DSCR financing?
Some lenders consider eligible mixed-use properties under DSCR or specialty investor programs, but commercial space, leases, property use, credit, reserves and jurisdiction requirements vary.
Is a 5-unit property financed like a normal rental house?
Usually not. A 5-unit property often falls outside standard 1-4 unit residential mortgage guidelines and may need multifamily, portfolio, DSCR or commercial financing.
What documents are needed for mixed-use or multifamily financing?
Common documents include leases, rent roll, operating history, purchase contract or payoff, insurance information, entity records, appraisal or valuation support, asset statements and property details requested by the lender.