5+ Unit Loans San Diego

A 5+ unit loan finances exactly what it sounds like: a residential building with five or more units under one roof. It’s the kind of financing you look at when you’re buying or refinancing a larger multifamily property and want rent coming in from more than a handful of tenants. Investors who’ve already worked their way through duplexes and fourplexes often find this is where the path leads next.

Financing 5+ Unit Properties

• These loans cover multifamily properties made up of five or more separate residential units.
• Smaller residential loans focus mostly on you, the borrower. Here, the property itself gets more scrutiny – specifically what it earns and how it holds up as an investment. A minimum DSCR of 1.15 is required.
• Lenders usually look at a mix of things: rental income, the property’s value, how much experience you bring, your credit, and the assets you can point to.
• Purchase, refinance, or portfolio expansion – this financing tends to stretch across all three.

Who Benefits Most from 5+ Unit Loans?

• Investors ready to take on bigger multifamily properties and grow their rental income along the way. This includes U.S. citizens, permanent resident aliens, and entity borrowers (LLC) with a personal guarantor.
• Landlords with a few years under their belt who’ve outgrown single-family homes and smaller rentals.
• Anyone playing the long game and building wealth through multifamily ownership.
• Borrowers whose target properties fall past the ceiling of a standard residential loan.

Important Considerations

• The draw is simple math: one property, several units, and rent arriving from each of them.
• Minimum loan of $350,000, maximum of $3.5 million. Maximum cash-out: $500,000. LTV up to 75%, minimum 680 FICO, reserves 6 months PITIA on subject property.
• 5/6 ARM, 5/6 ARM I/O, 30-year fixed, 30-year fixed I/O.
• Up to 3% seller concessions allowed toward closing.
• Run the numbers before you commit. Cash flow, operating expenses, and realistic returns all deserve a close read.
• Be ready for more paperwork than usual. Lenders will want to see your finances, your track record, and how the building has performed.
• It helps to work with someone who actually knows multifamily lending, such as DG Funding. The right partner can shape a loan structure around where you’re headed, not just where you are now.