DSCR Loans for 5–8 Unit and Mixed-Use Investment Properties
DSCR loans for 5–8 unit and mixed-use investment properties give mortgage brokers a financing solution for investor deals that no longer fit the traditional 1–4 unit residential lane. Rather than qualifying borrowers based primarily on personal income, these loans evaluate whether the property’s rental income generates enough cash flow to support the proposed mortgage payment.
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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.
Program Highlights
Qualification & Documentation
This program is designed for investment properties that generate enough rental income to support the proposed mortgage payment. Qualification is based primarily on the property's DSCR, helping many investors qualify without relying on traditional income documentation.
- Minimum 1.0 DSCR
- Minimum 700 FICO
- Qualification based on property cash flow
- Properties producing rental income
- Non-owner-occupied investment properties only
- Lease agreements used to verify rental income
- Clear, complete documentation helps support a smoother underwriting process
Loan Structure & Flexibility
The program offers flexible financing options for eligible investor transactions while maintaining predictable lending guidelines for larger multifamily and mixed-use properties.
- Up to 75% LTV
- Cash-out available up to 65% LTV
- No deposit sourcing required
- Up to $1M cash in hand
- Non-perm up to 75% LTV
- Commercial space under 50% (retail/office/restaurant usage)
Property & Loan Parameters
This program supports financing for eligible 5–8 unit multifamily and qualifying mixed-use investment properties that fall outside the traditional 1–4 unit residential DSCR market.
- 5–8 unit multifamily investment properties
- 2–8 mixed-use investment properties
- Commercial space limited to less than 50% of the property
- Loan amounts up to $3 million
- Investment properties only
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.
When should a broker use this program instead of a DSCR loan for a 1–4 unit property?
Use this program when the property falls outside the traditional 1–4 unit residential DSCR guidelines. It is specifically designed for eligible 5–8 unit multifamily and qualifying mixed-use investment properties.
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