DSCR Loans for 5–8 Unit and Mixed-Use Investment Properties
DSCR loans for 5–8 unit and mixed-use properties qualify larger investment assets based on rental income and property cash flow rather than the borrower’s personal income, giving brokers a clear path for investor deals that fall outside the standard 1–4 unit residential lane.
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Series 1
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DSCR (5-8)
About program
For investors looking to finance 5-8 unit multi-family properties, the DSCR (Debt Service Coverage Ratio) approach simplifies qualification by focusing on property cash flow. This program allows investors to build portfolios without relying on personal income documents. The property’s net rental income should ideally cover or exceed the mortgage payment, making qualification straight forward.
Key features
- No deposit sourcing
- Min DSCR of 1
- No tradeline requirement w/ 3 credit scores
- $1m cash in hand
- Cash-out up to 65% LTV
- Commercial space <50% allowed
- Loan amounts up to $2m
- Non perms up to 75% LTV
Required to Disclose
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
Copy of lease agreement(s)
(if applicable)
Required to Underwrite
(in addition to above)
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
Copy of lease agreement(s)
(if applicable)
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FAQ
Is there a minimum DSCR ratio required for 5–8 unit or mixed-use DSCR loans?
Yes. For 5–8 unit residential properties, the minimum DSCR ratio required is 1.0. A DSCR below 1.0 is not permitted, as the property must generate enough rental income to fully cover the proposed mortgage payment. This ensures stronger cash-flow stability for investors and aligns with DSCR underwriting standards.
Do all units in a 5–8 unit or mixed-use property need to be rented for DSCR loan qualification?
Yes. To qualify for a DSCR loan on 5–8 unit or mixed-use properties, all rental units must be leased and producing income. Because DSCR loans rely solely on property cash flow, not personal income, fully rented occupancy is necessary to establish an accurate DSCR calculation and meet program requirements.
Can a borrower qualify for a DSCR loan if part of the building is owner-occupied?
Typically no. DSCR loans are designed for non-owner-occupied, investment-only properties. If any portion of the building is owner-occupied, the property may not meet DSCR eligibility requirements, and different underwriting guidelines or loan programs may apply.
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