Small Multifamily & Apartment Building Financing
DSCR Financing for 5–10 Unit Apartment Properties, Purchases and Refinances
BancorpOne, Inc. is a commercial mortgage brokerage specializing in small-balance multifamily debt and rental property cash-flow underwriting. We structure stabilized 5–10 unit apartment acquisitions and refinances sized on Net Operating Income (NOI), alongside eligible 1–4 unit rental DSCR loans for experienced real estate investors.
Stabilized apartment acquisitions & refinances sized on T12 Net Operating Income (NOI).
Analytical underwriting of rent rolls, T12 expenses, vacancy, taxes, and insurance at 1.20x–1.25x DSCR.
Built for established multifamily operators with 20%–30%+ equity and performing debt profiles.
Secondary DSCR program for single-family, duplex, triplex, and fourplex investment properties.
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Apartment Building & DSCR Financing Solutions
5–10 Unit Apartment DSCR Loans
Commercial DSCR mortgages sized on verified T12 Net Operating Income (NOI), certified rent rolls, and 1.20x–1.25x coverage.
Underwriting Criteria →Small Multifamily Acquisition & Refi
5, 7, 10, and 30-year fixed or hybrid structures for stabilized apartment purchases, rate/term refinances, and conservative cash-out.
Underwriting Criteria →Eligible 1–4 Unit Rental DSCR
Business-purpose DSCR mortgages for single-family, duplex, triplex, and fourplex rentals qualified on lease income vs. PITIA.
Underwriting Criteria →Frequently Answered Financing Questions
Verified answers to common borrower and broker inquiries regarding loan sizing, guidelines, and execution.
What is BancorpOne and is it a direct bank or a commercial mortgage brokerage?
BancorpOne, Inc. (NMLS #1934536 | CA DRE #01998385) is a licensed commercial mortgage brokerage specializing in DSCR financing for 5–10 unit apartment buildings and eligible 1–4 unit rental properties across 40 eligible states, including California.
BancorpOne is not a depository bank or direct balance-sheet lender. We act as commercial mortgage advisors with established lender relationships across 1–10 unit DSCR debt platforms, small-balance multifamily lenders, and regional commercial banks—structuring financeable rental property acquisitions and refinances.
Request a Multifamily Loan Review →How do 5–10 unit apartment building DSCR loans differ from 1–4 unit DSCR loans?
A 5–10 unit apartment building is underwritten as commercial multifamily real estate using verified Net Operating Income (NOI) divided by annual debt service, whereas 1–4 unit rental loans are sized using gross rent divided by PITIA.
For 5–10 unit properties, lenders audit the certified rent roll, apply a 5%–8% economic vacancy factor, and deduct trailing-12-month (T12) operating expenses—including reassessed property taxes, hazard insurance, landlord-paid utilities, repairs, and a 4%–6% property management fee—to establish underwritten NOI before sizing the mortgage at a 1.20x–1.25x DSCR.
Request a Multifamily Loan Review →How much debt can a 5–10 unit apartment building support?
Maximum supportable apartment debt is the lesser of the maximum Loan-to-Value (typically 70%–75% LTV) or the loan amount supported by Net Operating Income at a 1.20x–1.25x DSCR.
Practical example: Suppose an 8-unit apartment building generates $192,000 in Gross Potential Rent. Less 5% vacancy ($9,600), Effective Gross Income is $182,400. Subtracting $68,400 in normalized T12 expenses leaves $114,000 in Annual NOI. At a 1.25x DSCR requirement, maximum annual debt service is $91,200 ($114,000 ÷ 1.25). At a 7.25% rate on a 30-year amortization (8.186% annual debt constant), the building supports approximately $1,114,000 in senior debt.
Run Multifamily NOI & DSCR Sizer →How do lenders evaluate rent rolls, T12 operating statements, taxes, and insurance?
Underwriters cross-reference the current certified rent roll against executed leases and trailing-12-month (T12) operating statements, while adjusting property taxes and insurance to forward-looking quotes.
Even if a seller’s historical T12 shows low property taxes or minimal repairs, lenders underwrite purchases using post-acquisition reassessed property taxes, bound replacement-cost hazard insurance, a mandatory 4%–6% management fee, and $350–$600 per unit in annual maintenance and replacement reserves.
Review Underwriting Waterfall →How much down payment or borrower equity is required for a 5–10 unit apartment purchase?
Stabilized 5–10 unit apartment acquisitions typically require 25% to 30% down payment (70%–75% maximum LTV), while eligible 1–4 unit rental DSCR purchases allow 20% to 25% down (75%–80% LTV).
In high-cost markets where cap rates are compressed (such as coastal California), the 1.20x–1.25x DSCR coverage test may constrain leverage to 60%–68% LTV, requiring a 32%–40% down payment so that property NOI comfortably covers annual debt service. Borrowers should also maintain 6–9 months of post-closing PITIA liquidity reserves.
Request a Multifamily Loan Review →What are the requirements for a small multifamily rate-and-term or cash-out refinance?
Small multifamily refinances require a performing existing mortgage, stabilized physical occupancy of 85%–90%+, and documented T12 operating statements supporting at least a 1.20x–1.25x DSCR.
Rate-and-term refinances generally size up to 75% LTV to pay off maturing bank or seller-carried debt, while cash-out refinances size up to 65%–70% LTV so investors can recapitalize documented unit renovations or acquire additional rental properties.
Submit Refinance Scenario →What documents are required for an apartment building DSCR loan vs. an initial review?
An initial loan review requires only property state, unit count, rent roll total, estimated annual expenses, and loan request—not a full underwriting package.
Once indicative sizing is confirmed and you move to formal underwriting, lenders require: (1) Current Certified Rent Roll, (2) Trailing 12-Month (T12) Income & Expense Statement, (3) Executed Tenant Leases, (4) Property Tax Bill & Hazard Insurance Quote, and (5) Entity Operating Agreement & Schedule of Real Estate Owned (SREO).
View Document Checklist →Does BancorpOne also arrange 1–4 unit rental DSCR loans for real estate investors?
Yes. Alongside our primary 5–10 unit apartment specialization, we maintain active lender relationships for eligible 1–4 unit rental DSCR loans (single-family rentals, duplexes, triplexes, and fourplexes).
1–4 unit DSCR loans are business-purpose investment mortgages qualified using in-place lease income or Appraiser Form 1007/1025 market rent schedules divided by monthly PITIA (Principal, Interest, Taxes, Insurance, and HOA), without requiring personal tax returns or W-2 debt-to-income calculations.
Screen a 1–4 Unit DSCR Loan →Which states does BancorpOne serve for small multifamily and 1–10 unit DSCR loans?
BancorpOne serves 40 eligible states, including California, subject to third-party lender program guidelines and state commercial mortgage licensing requirements.
All loans arranged by BancorpOne, Inc. are business-purpose commercial real estate and rental investment loans made to legal entities (LLCs, LPs, or Corporations). Distressed properties, maturity defaults, inadequate-equity requests, and closing deadlines under 21 days are flagged for manual underwriting review rather than automated DSCR placement.
Check State & Deal Eligibility →