5+ units
triggers commercial underwriting

NOI/DSCR
property income qualifies

Up to 80% LTV
on stabilized assets

$500K–$35M
loan amounts

Who Multifamily Commercial Loans Serve

• Investors acquiring apartment buildings (5–50+ units)
• Investors scaling from small residential to commercial multifamily
• Value-add investors repositioning older apartment buildings
• Self-employed investors who can’t qualify for agency commercial loans
• Investors refinancing out of hard money into long-term multifamily loans
• Buyers of mixed-use properties (residential + retail)

Property Types That Qualify

• 5–100+ unit apartment buildings
• Mixed-use buildings with residential and ground-floor retail
• Student housing and workforce housing complexes
• Age-restricted senior housing (case-by-case)
• Value-add properties with current below-market rents
• Portfolio loan covering multiple multifamily properties

Key Underwriting Factors

• NOI: Gross rents minus operating expenses (not including debt service)
• DSCR: NOI ÷ Annual Debt Service — we target 1.20+ for most programs
• Occupancy: Current occupancy rate and historical stability
• Rent Roll: Lease terms, tenant mix, and market rent comparison
• Physical condition: Deferred maintenance and cap ex needs
• Location: Market demand, vacancy rates, rent growth trends

Loan Parameters

• Minimum 660 credit score (asset-based deals can be more flexible)
• DSCR of 1.20 preferred; 1.0 minimum on some programs
• LTV: up to 75–80% on stabilized; 65–70% on value-add
• Loan amounts: $500K to $35M+
• Terms: 5, 7, 10-year fixed with 25–30-year amortization
• Recourse and non-recourse options available

What is the difference between a 4-unit and 5-unit loan?
1–4 unit properties are classified as residential and qualify using personal income under conventional or Non-QM residential guidelines. 5+ units are classified as commercial — they use commercial underwriting based on the property’s income. This distinction has major implications for how you qualify.

Do I need a property management company?
Not required for approval, but properties with professional management are viewed more favorably. For larger buildings (20+ units), management agreements are typically expected. For smaller buildings, owner management is common and accepted.

Can I qualify a value-add property with below-market rents?
Yes. For value-add deals, lenders look at both current rents and stabilized market rents. They may lend on a blend of current and projected income, or require you to demonstrate a clear path to stabilization through lease-up or renovation.

What reserves are required for multifamily commercial loans?
Typically 6–12 months of debt service in reserves post-close. Lenders also look for a capital reserve for ongoing maintenance. Large deferred maintenance items may need to be addressed or escrowed at closing.

Can I do a cash-out refinance on a multifamily property?
Yes. Cash-out refinances on multifamily commercial properties are common. The LTV limits for cash-out are typically 70–75% for stabilized properties. This is a popular strategy for investors who want to pull equity for new acquisitions.

Is there a minimum occupancy rate to qualify?
Most lenders want to see 85%+ occupancy at the time of application. Lower occupancy can be acceptable if there’s a documented reason (renovation, new acquisition) with a clear path to stabilization within 90–180 days.