Multi-Family Loans for 2–10 Unit Properties

The gap this program fills

Small multi-family sits in an awkward place. Above four units, conventional residential lending stops. Below roughly twenty units, most agency and commercial lenders are not interested — the loan is too small to be worth their process. Meanwhile the asset itself is often exactly what a value-add investor wants: a twelve-unit building with rents thirty percent under market, or an eight-unit that has been half-vacant for a year.

That is the gap this program fills. We underwrite the asset and its income potential, not a stabilized trailing twelve that a distressed building does not have yet.

What we finance

Residential multi-family from two to twenty units: duplexes and fourplexes, small apartment buildings, townhome and rowhouse clusters under one ownership, and small portfolios of up to five single-family rentals financed together under one facility, provided they are in the same county.

Occupancy is not a gate. We fund fully vacant buildings where the plan is to renovate and lease, partially occupied buildings mid-lease-up, and stabilized buildings where the borrower needs speed rather than the lowest rate. What matters is that the business plan and the timeline are coherent, and that the exit — sale or refinance into permanent debt — is realistic at the value the plan produces.

Mixed-use with a substantial commercial component and true commercial multi-family above twenty units fall outside this program.

Terms at a glance

How multi-family underwriting differs

A single-family flip is underwritten on comparable sales. A multi-family building is underwritten on income, and that changes what matters in your file.

We look at the rent roll and lease expirations, the current versus market rent gap, actual operating expenses rather than a rule of thumb, the capital plan for bringing units to market rent, and where the property lands on both a cap-rate valuation and a comparable-sales basis. On a value-add deal, the underwriting question is whether your rent assumptions are supportable — a proforma showing every unit at market rent within six months invites scrutiny that a staged, realistic lease-up plan does not.

The strongest small multi-family files we see share one trait: a unit-by-unit plan. Which units turn first, what each turn costs, what the new rent is, and when it is leased. That level of specificity moves leverage more than any other single thing you can send us.

The typical path to permanent financing

Most borrowers use this program as the first half of a two-step. Short-term multi-family capital acquires and stabilizes the building; once it is leased and the income is documented, the property refinances into long-term debt. For two-to-four unit properties that permanent takeout is frequently our DSCR program. Above four units it is usually agency or a commercial lender, and the property needs several months of stabilized operating history to qualify.

Plan that sequence before you close the short-term loan. The most common mistake on small multi-family is taking a twelve-month bridge on a building that realistically needs eighteen months to stabilize and season.