Does a 5- to 10-unit building qualify?
Is there a DSCR loan for a 6-unit or 8-unit building in Texas?
Yes. Some wholesale lenders offer DSCR-style or small-balance multifamily programs for five to roughly ten residential units. Each lender sets its own unit-count and loan-size limits, so the first question we answer on any file is which programs actually take your unit count and location.
Why is a 5-unit building treated differently from a fourplex?
Four units is the line between residential and commercial lending. A fourplex is underwritten like a house with extra leases. At five units the building moves into investor multifamily or small-balance commercial underwriting, where the rent roll, the operating statement and an income-approach appraisal carry most of the weight. See 2-4 unit vs 5-10 unit DSCR.
Can I get a DSCR loan in an LLC for a Texas apartment building?
Usually, yes. Many wholesale programs lend to LLCs and other entities, normally with personal guaranties from the members. Bring the certificate of formation, company agreement, EIN letter and any assumed-name filings. Each program sets its own rule for which members have to guarantee.
Can I live in one of the units?
No. Every program we arrange is business-purpose financing for non-owner-occupied property. If you or a family member will live in any unit, this financing doesn't fit, and we don't arrange owner-occupied loans.
Do you finance two small buildings on one lot, or a mixed-use building?
Sometimes. Two buildings on one parcel that total five to ten units can work with some programs. Limited ground-floor commercial space is accepted by some programs and not others. Send the site plan, the unit and square-footage breakdown and any commercial lease.
The numbers
What DSCR do I need for a 5-10 unit building?
It depends on the program. Most long-term programs want the rent to cover the debt and carrying costs with some cushion, and many small-balance programs measure coverage on net operating income after a vacancy allowance, management and reserves. Run your building in the 5-10 unit DSCR calculator both ways before you make an offer.
How is DSCR calculated on a small apartment building?
Two common ways. The residential-style method divides gross monthly rent by the monthly payment including taxes, insurance and any dues. The commercial-style method divides annual net operating income by annual principal and interest. Example: 8 units at $1,150 is $9,200 of monthly rent; against a $7,400 total monthly payment, that is about 1.24.
Will the lender use my pro forma rents?
Rarely. Underwriters size the loan on in-place rent from current leases, checked against the appraiser's market rent. Planned increases count once they are on signed leases. If the building needs a lease-up, read about bridge-to-DSCR financing.
Do I need personal tax returns?
Usually not to qualify. Rent-based programs size the loan on the building, though they still check credit, reserves and your experience owning rentals. Bank commercial loans are the ones that commonly ask for returns and a global cash-flow analysis.
Do you publish pricing?
No. Pricing comes from wholesale lenders, changes often and depends on the building, your credit, the loan size and the structure you choose. We show you the actual quotes on your scenario instead.
Texas-specific questions
Can a Texas city cap the rent on my apartment building?
Generally, no. Texas Local Government Code § 214.902 lets a city adopt rent control only after finding a housing emergency caused by a disaster, and the governor has to approve the ordinance. Your rent increases still have to follow your leases and Texas Property Code rules.
Do Texas property taxes go up after I buy an apartment building?
They can. Appraisal districts reappraise property regularly, and a recent sale price can show up in the next valuation. Rentals have no residence homestead exemption or cap. Read Texas property taxes on a 5-10 unit building.
How does windstorm or flood insurance affect a Gulf Coast building?
It can change the numbers a lot. Coastal buildings may need a separate windstorm policy and, in flood zones, flood coverage. Get real quotes on the actual building during your option period, because insurance is one of the biggest lines in the DSCR math.
Is a master-metered building harder to finance?
Not necessarily, but owner-paid utilities are a real expense and lenders count them. If you bill tenants back through submeters or an allocation formula, follow the Texas rules for apartment utility billing and document the reimbursements. See master-metered utilities and DSCR.
Are older Texas buildings with foundation issues financeable?
Sometimes. Lenders and appraisers look at whether movement is active, how it affects habitability and value, and whether repairs are documented. A structural engineer's report helps. Significant active problems often call for bridge financing first.
Working with us
Are you a lender?
No. Loan Daddy LLC is a mortgage broker, not a lender. We arrange and shop financing from wholesale lenders, who underwrite, approve and fund the loan under their own guidelines.
What should I send to get started?
The address, unit count and mix, a rent roll with lease dates, the trailing 12-month operating statement, the current tax bill, insurance quotes, the utility setup, the price or value, your loan request and any planned capital work. Start at /apply.
Do you arrange duplex, triplex or fourplex loans here?
This site covers five to ten units only. For 1-4 unit Texas rentals, see the Texas home site, dscrloanstexas.com.