INVESTOR GUIDE · 2–4 UNITS
2–4 unit DSCR loans
The pricing and occupancy trade-offs. Duplexes, triplexes and fourplexes carry a rate adjustment, but steadier occupancy and the extra rent often pay for it.
The short answer
- 2–4 unit properties carry a pricing adjustment, so the rate typically goes up.
- Occupancy is better on more units. When one tenant moves out on a fourplex, three are still paying, so it’s the safer bet.
- The debt service usually improves too, because the rent from every unit adds up.
- If the property gets to a 1.25+ DSCR, that benefit can offset the unit adjustment: up a quarter, down a quarter.
THE RATE SIDE
Units carry a pricing adjustment
Lenders price 2–4 unit properties with a rate adjustment, and the size of it depends on the lender and the unit count. Expect the rate to move up compared with a single-family rental.
THE OCCUPANCY SIDE
More units, steadier occupancy
Occupancy is better on a fourplex. When one tenant moves out, the other three are still paying. A single-family rental with one vacancy is collecting zero rent. That makes a 2–4 unit property the safer bet, and it’s why these properties tend to debt service better. The pricing hit for the units can be offset by the better ratio.
THE RENT SIDE
More doors, more rent, stronger DSCR
Lenders add the rent from every unit together, so multi-unit properties usually debt service better. That’s where the trade-off pays off: if the property reaches a 1.25+ DSCR, the higher rents improve the debt service, and the pricing benefit of the stronger ratio can wash out the unit adjustment. The rate might go up a quarter for the units, then come down a quarter for the DSCR.
Run each unit’s rent in the 2–4 unit mode of our DSCR calculator.
STRAIGHT ANSWERS
2–4 unit questions
Can I get a DSCR loan on a duplex or fourplex?
Yes. DSCR loans cover 2–4 unit properties, and lenders add the rent from every unit together.
Do 2–4 unit DSCR loans have higher rates?
Usually, because lenders apply a pricing adjustment for units. A 1.25+ DSCR can offset it.
How is rent calculated on a 2–4 unit property?
The lender adds the qualifying rent from each unit to get the total rent for the DSCR.
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DSCR KINGS · INVESTOR FINANCING
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Business-purpose loans for investment properties only; not for owner-occupied homes. Lending guidelines, leverage and loan programs vary by lender and by state and are subject to change. Terms and approval depend on the property, the borrower’s credit and capital-partner guidelines and are not guaranteed. Examples are for illustration only.
