Multifamily DSCR Loan 2026: Financing 2-4 Unit Properties Without Tax Returns

DSCR loans on 2-4 unit properties follow the same core logic as single-family DSCR: rental income divided by PITIA must meet the lender's minimum threshold. The difference is that all units' market rents are included in the numerator, including any owner-occupied unit. This increases income and often makes the math work better than SFR DSCR.

DSCR Calculation for 2-4 Units

The DSCR calculation uses the combined market rent for all units, whether occupied or vacant. Market rent comes from the appraiser's rent schedule, Form 1007 or 1025. If the borrower occupies one unit, the market rent of that unit is still included in income. PITIA includes the full principal, interest, taxes, insurance, and any HOA payments. Monthly gross rent divided by monthly PITIA equals DSCR.

• ✦Form 1007 for single-family with ADU; Form 1025 for 2-4 unit properties
• ✦All units' market rent included even if vacant or owner-occupied
• ✦Minimum DSCR typically 1.0 to 1.25; some lenders allow 0.75 to 1.0 with rate adjustment
• ✦Maximum LTV: 75% to 80% on purchase, 70% to 75% on cash-out for 2-4 units
• ✦Minimum FICO: typically 620 to 680 depending on LTV and lender

5+ Units: Different Product

Properties with 5 or more units are classified as commercial real estate, not residential. These require a commercial DSCR loan, which is underwritten differently: global cash flow analysis, entity borrower common, different LTV caps (typically 65% to 75%), and commercial appraisal using income capitalization method. Do not attempt to place a 5-unit property in a residential DSCR product.

Who Offers These Programs

Most non-QM lenders with active DSCR programs cover 2-4 unit properties. Visio Lending, Angel Oak Mortgage, Deephaven, and A&D Mortgage have been consistent DSCR lenders across unit counts. Always confirm current program availability and DSCR floor before submitting, as lender programs shift with the secondary market.