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Investor Loans (5+ Units)
Financing Solutions for Multifamily Real Estate Investors
Updated: February 2026
Reviewed: February 2026 by Sebastian Naranjo, NMLS #2313958
Investing in multifamily properties with five or more units can be a lucrative venture. But financing these investments differs significantly from single-family homes or smaller multifamily properties. At SRK CAPITAL, we specialize in offering tailored loan solutions for investors. We can help them expand their portfolios with larger multifamily assets.
Ready to Expand Your Portfolio?
Our team can help you navigate the complexities of multifamily property financing.
What Are Investor Loans (5+ Units)?
Multifamily properties with five or more units are classified as commercial real estate. This classification affects the loan types, terms, and qualification criteria available to investors. Unlike residential loans, commercial loans focus more on the property's income potential and less on the borrower's personal income.
Key Point: Properties with 5+ units require commercial financing, which evaluates the property's ability to generate income rather than just your personal financial situation.
Key Differences Between Residential and Commercial Loans
Property Classification
Properties with five or more units are considered commercial.
Underwriting Focus
Emphasis is placed on the property's income-generating ability rather than the borrower's personal income.
Loan Terms
Commercial loans often have shorter terms. They typically range from 5 to 10 years, with amortization periods up to 30 years.
Interest Rates
Rates can be higher than residential loans due to increased risk factors.
Types of Loans for 5+ Unit Properties
1
Bank Loans
Traditional banks offer commercial loans for multifamily properties. These loans usually need strong credit, a solid business plan, and a significant down payment. Terms and rates can vary based on the lender's policies.
2
Government-Sponsored Enterprise (GSE) Loans
Agencies like Fannie Mae and Freddie Mac offer multifamily loan programs. These loans often offer competitive rates and terms but have strict eligibility criteria. For instance, Fannie Mae's small loan program caters to properties with up to 50 units or loans under $7.5 million.
3
Commercial Mortgage-Backed Securities (CMBS) Loans
Also known as conduit loans, are pooled with other commercial mortgages and sold to investors. They can offer non-recourse options and competitive rates but can come with prepayment penalties.
4
Debt Service Coverage Ratio (DSCR) Loans
These loans assess the property's ability to cover its debt obligations. Lenders look for a DSCR of at least 1.20+, meaning the property's net operating income should be 120% of the debt service.
5
Private and Hard Money Loans
These are short-term loans from private investors or companies. They often have higher interest rates but can be useful for quick acquisitions or properties needing significant rehabilitation.
Key Considerations When Choosing a Loan
Loan-to-Value (LTV) Ratio
This ratio compares the loan amount to the property's value. Commercial lenders typically offer LTVs up to 75-80%.
Debt Service Coverage Ratio (DSCR)
A higher DSCR indicates a property's strong ability to cover debt obligations. Lenders often need a DSCR of 1.20+.
Interest Rates and Terms
Commercial loans can have fixed or variable rates. Terms are generally shorter than residential loans, with amortization periods up to 30 years.
Recourse vs. Non-Recourse
Recourse loans hold the borrower personally liable, while non-recourse loans limit the lender's claim to the property itself.
Steps to Secure Your Investor Loan
1
Evaluate Your Investment Goals
Define your investment strategy and determine the type of property that aligns with your goals.
2
Choose the Right Lender
Work with lenders experienced in multifamily financing. At SRK CAPITAL, we offer tailored solutions for property investors.
3
Complete Your Application
Collect all necessary documentation, including financial statements and property details.
4
Underwriting and Approval
The lender will review your application, assess the property's value, and ask for any documents still needed.
5
Closing
Once approved, you'll be ready to close on your new property. Our team will make sure you have a smooth closing process.
Why Choose SRK CAPITAL for Your Multi-family Lending Needs?
Experience
We specialize in financing multifamily properties and understand the unique challenges investors face.
Tailored Solutions
Our diverse loan programs cater to various investment strategies and financial situations.
Competitive Rates
We strive to offer the best possible terms to help you maximize your investment returns.
Streamlined Process
Our efficient application and approval process makes sure we close on time.
Partner with SRK CAPITAL for Financing multifamily properties with five or more units requires a strategic approach and understanding of commercial lending. By partnering with our team, we can help can navigate the complexities of multifamily financing. That way you can make informed decisions to achieve your investment goals.
Contact SRK CAPITAL today to learn more about our investor loan programs. Learn how we can help you in expanding your real estate portfolio.
Financial Disclosure
The information provided on this page is for educational purposes only and does not constitute financial, legal, or tax advice. Mortgage rates and terms are subject to change and may vary based on your individual financial situation. Please consult with a licensed mortgage professional at SRK CAPITAL for personalized guidance.