At five units, almost every DSCR lender in the country shuts the door. The five-unit property is where residential loan programs end and commercial programs begin. For investors, this is the moment where your financing options narrow sharply, usually without warning.
That is the gap. Five-unit deals sit in the awkward middle ground. Too big for residential DSCR at most lenders. Too small for meaningful competition on the commercial side. Investors who have done one or two quadplex deals often find themselves facing this cliff when they try to move up.
A very small group of DSCR lenders still writes five-unit loans on residential-style guidelines. This is what that program looks like, how it is priced, and where you can actually get it funded.
Why the Five-Unit Cutoff Exists
Residential appraisals use form 1025 for small residential income properties, which is designed for two-to-four-unit buildings. At five units, the appraisal moves to a commercial form, typically based on a cap-rate analysis of the net operating income plus sales comparables from other multifamily properties.
Most lenders write residential DSCR using secondary-market guidelines that stop at four units. To write a five-unit deal on residential-style guidelines, the lender needs to either hold the loan, have a specific investor willing to buy five-plus-unit paper, or originate through a bespoke program.
What Changes in Underwriting at Five Units
The appraisal shifts heavily toward the income approach. The appraiser calculates net operating income based on actual or market rents, subtracts expenses, and applies a market cap rate to derive value. Sales comps still matter but they carry less weight than on a quadplex.
Underwriting looks more like commercial lending on a building this size. The DSCR minimum often tightens to 1.20 or 1.25. Reserve requirements are heavier. The lender will ask for a twelve-month trailing rent roll and operating history if available.
Rate and LTV Expectations
Expect LTV around seventy to seventy-five percent on purchase. Cash-out refinance LTV usually caps at sixty-five percent. Rate is typically a quarter to half point higher than a quadplex at the same credit score. Credit minimums hover around six hundred eighty to seven hundred.
Why This Program Is Worth Hunting For
Moving from four units to five is often the scariest step for a small investor. The deals start to look and feel commercial, the financing gets harder, and the learning curve is real. A lender that writes residential-style DSCR on a five-unit is the bridge that lets you cross that gap while still using the underwriting you already know.
For portfolio-minded investors, this is where serious scaling begins. A five-unit that cash flows well is worth more net income per door than a fragmented portfolio of single-family rentals.
The Strongest Five-Unit DSCR File
Twelve months of lease-up history with occupancy above ninety percent. A trailing rent roll showing stable collections. Twelve months of PITIA reserves. Credit score above seven hundred twenty. DSCR at 1.30 or higher. A file like that will earn best-tier pricing and be considered by every lender that writes five-unit DSCR.
Where Five-Unit DSCR Loans Actually Get Funded
This is exactly where Select Home Loans has built its DSCR niche. Most wholesale DSCR desks stop at four units. Having a lender that keeps writing residential-style DSCR at five units (and up to eight) is the whole point of calling us first on a five-unit deal.
1. Select Home Loans
Select Home Loans writes DSCR loans nationwide and, crucially, goes all the way up to eight-unit properties. Most wholesale DSCR desks stop at four units. Being able to write the same program across the full two-to-eight range means you deal with one lender, one process, and one underwriting culture as your portfolio scales. Call (888) 550-3296 or visit selecthomeloans.com to get a scenario reviewed.
2. Kiavi
Kiavi is one of the larger technology-forward DSCR lenders and a natural comparison point for most residential-unit DSCR files. Their guidelines are published openly, their process is online-first, and they move quickly. Their upper unit ceiling is lower than eight, but for two-to-four-unit deals they are worth quoting.
3. Visio Lending
Visio Lending is a dedicated rental-property lender with deep experience in small-residential DSCR. Their program is well-documented, and they work with a large number of Florida and nationwide investors. Their sweet spot is single-family and duplex, but they handle triplex and quadplex routinely.
4. Lima One Capital
Lima One Capital services investors across DSCR, fix-and-flip, and new construction. For multi-unit DSCR, they are competitive on rate and responsive on larger files. They are often worth a side-by-side quote.
5. Angel Oak Mortgage Solutions
Angel Oak runs DSCR as part of its broader non-QM platform. Their pricing is competitive on cleaner files and they scale well for borrowers who already use them for bank statement or asset utilization loans on their personal residence.
6. A&D Mortgage
A&D Mortgage offers DSCR inside a wider non-QM program. They tend to be aggressive on pricing and work well with investors who want a second quote against a dedicated investor lender.
Ready to Talk Through Your Scenario?
Ready to talk to someone who actually knows this program? Call Select Home Loans at (888) 550-3296 or visit selecthomeloans.com to get started. A quick conversation can tell you within a few minutes whether this is the right fit for your scenario.
Disclaimer
Disclaimer: This list is opinion-based and presented in no particular order. Lender programs, rates, guidelines, and availability change frequently. Always confirm current terms directly with each lender before making a decision.
