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What happens when a rental property has 5 or more units?

Why residential DSCR stops at four units, what changes at five units, and which program lane fits 5 to 10 unit and 10+ unit apartment buildings.

Talk through your building5 to 10 unit DSCR

The four-to-five unit cliff

When a rental property has 5 or more legal units, it usually stops being a residential DSCR loan. A fourplex can fit 1 to 4 Unit DSCR with leases and market rent on each unit. At five units, the same building is an apartment property in most lender boxes.

That shift is not cosmetic. Documentation, minimum loan size, how expenses are reviewed, and who will actually quote the deal all change. Investors stepping from four units into a six or eight unit building often discover their residential lender simply does not have a product slot.

5 to 10 units: small multifamily DSCR

Stabilized 5 to 10 unit apartment buildings typically fit 5 to 10 Unit DSCR. Underwriting still uses property income, but the rent roll matters more than a single lease. Lenders look at occupancy, delinquency, concessions, and whether trailing income supports the payment.

  • ✓Loan sizes: $500,000 to $15,000,000
  • ✓Up to 75% LTV on refinance and purchase
  • ✓Terms: 25 to 30 years fixed with interest-only options on select deals
  • ✓Minimum DSCR: often 0.90 on smaller balances and 1.0 above $1 million

This lane exists because 5 to 10 units is too big for residential DSCR and often too small for a full agency apartment process. Garden-style buildings in the 6 to 10 unit range are a common fit.

Crossing from four units into five or more?
Send legal unit count first. One number sets the whole underwriting path.
Send property details

11 or more units: apartment DSCR

At eleven units, the property moves again. 10+ Unit DSCR covers 11 to 200 unit apartment and multifamily buildings. Many DSCR lenders hard-cap at 10 units, so owners of a 12 unit or 14 unit building are often searching specifically for someone who goes above that ceiling.

  • ✓Loan sizes: $500,000 to $15,000,000
  • ✓Up to 75% LTV on refinance and purchase
  • ✓Underwriting: NOI based with trailing twelve-month operating statements, rent roll, occupancy, and sponsor review
Not scaled-up residential math

This is not the same math as a duplex DSCR quote scaled up. Apartment underwriting starts from NOI and the rent roll.

What does not change

Several investor fundamentals stay the same when you cross the five-unit line:

  • ✓Business-purpose investor loans still close in LLCs and other entities
  • ✓Tax returns are still often not required on DSCR programs
  • ✓Cash out with low seasoning is still available on select deals, with stricter value-explanation rules on 5+ unit and commercial property
  • ✓The property still needs to be non-owner occupied investment real estate

Capituro does not offer owner-occupied home loans.

Common questions

What happens when a rental property has 5 or more units?+

At five legal units, the property usually leaves residential 1 to 4 DSCR and moves into small multifamily underwriting. Loan size, documentation, and how income is tested all change.

Can a five-unit building use 1 to 4 DSCR?+

Generally no. Legal unit count of five or more routes to 5 to 10 Unit DSCR unless the building has eleven or more units, which moves to 10+ Unit DSCR.

What changes the answer

  • ·Mixed-use buildings with heavy commercial income may route to Commercial DSCR instead of multifamily DSCR.
  • ·Vacant or mid-renovation 5+ unit buildings may need bridge first.
  • ·Scattered-site portfolios aggregated by unit count can sometimes fit 10+ Unit DSCR when total units exceed eleven.
  • ·Affordable housing, student housing, and specialty uses add compliance documentation.

Send legal unit count first. That single number determines which program page and parameter set applies.

Next step

Match the right multifamily lane

Tell us the unit count and property address. We will route you to the program that fits your building.