Mortgage Glossary
Multi-Unit DSCR
A specialty DSCR program for 5–8 residential units or 2–8 mixed-use buildings — qualified on property cash flow, for experienced investors only.
What is Multi-Unit DSCR?
Multi-Unit DSCR is a category of DSCR loan designed for residential rental properties that exceed the 4-unit threshold of standard DSCR programs. Once a building has 5 or more residential units — or includes commercial space along with residential units — conventional banks treat it as commercial real estate, with longer underwriting cycles, higher rates, and balloon payments.
A multi-unit DSCR loan keeps the underwriting investor-friendly: qualification is on the property’s rental cash flow (DSCR ≥ 1.00 required), not on borrower personal income. Loan terms are typically 30-year amortization, fixed or ARM. The underwriting still accounts for the larger property size with stricter reserves and tighter LTV caps than standard 1–4 unit DSCR.
These products fill a gap in the lending market: small apartment buildings and urban mixed-use too large for residential DSCR but too small (or too operationally simple) to justify commercial-bank treatment.
How Multi-Unit DSCR applies at Total Quality Lending
Total Quality Lending’s Multi-Unit DSCR program covers single investment properties with:
- 5–8 residential units, OR
- 2–8 mixed-use units, where commercial space is ≤ 49.99% of total building area
Program specs:
- Minimum FICO: 700 (720 in CT, FL, NJ)
- Loan amounts: $400,000 to $2,000,000
- Max LTV: 75% purchase / 70% rate-term / 65% cash-out at the $1.5M tier (70% / 65% / 65% on the $2M tier)
- DSCR ≥ 1.00 required — no sub-1.00 tier
- Experienced investors only — first-time investors not eligible
- Ineligible states: IL, NY
- Foreign Nationals not eligible under this product
Related terms
FAQs
What's the difference between DSCR and Multi-Unit DSCR?
Standard DSCR finances 1–4 unit residential properties. Multi-Unit DSCR is a separate TQL program for 5–8 unit residential buildings and 2–8 unit mixed-use buildings — properties large enough to be considered commercial by conventional banks but still treated as investor product by TQL.
Can a first-time investor get a Multi-Unit DSCR loan?
No. Multi-Unit DSCR is for experienced investors only. First-time investors and first-time homebuyers are not eligible. Foreign Nationals are also ineligible under this product (they are eligible under TQL's standard DSCR program for 1–4 unit properties).
Which states are ineligible?
Illinois (IL) and New York (NY) are ineligible for Multi-Unit DSCR. Connecticut, Florida, and New Jersey have overlays that raise the minimum FICO to 720 and cap LTV at 70% on purchase and 65% on refinance.
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