2-4 unit residential investor
Standard residential investor financing applies to 2-4 unit properties. Hard money for acquisition/rehab; DSCR refi for stabilized hold. Most institutional lenders treat 2-4 unit identically to single-family.
5+ unit small commercial
Crosses into small commercial real estate. Income-approach underwriting (capitalized NOI rather than comparable sales). Different lender pool — specialty operators like Velocity Mortgage, RCN Capital, Temple View Capital, and CoreVest serve this market.
Frequently Asked Questions
2-4 units are residential investor financing — most hard money and DSCR lenders cover these. 5+ units crosses into small commercial — fewer lenders, different underwriting (income-approach rather than comparable-sales), and typically lower LTVs.
2-4 unit: 9-12% hard money, 7-9% DSCR. 5+ unit commercial: 9-13% hard money, 7-10% DSCR.
2-4 unit: 80% typical. 5+ unit: 70-75% typical.
Multi-unit-heavy neighborhoods include Albany Park, Belmont Cragin, Humboldt Park, Logan Square (with deconversion considerations), Avondale, South Shore, Auburn Gresham, Pilsen, Little Village, Uptown, and Edgewater.