DSCRLensEducation
Commercial DSCR Lenders: Who Funds 5+ Unit and Mixed-Use Deals
Roy · May 30, 2026 · 9 min read
Commercial DSCR lenders fund what residential DSCR programs won't — 5+ unit multifamily, mixed-use, small commercial. A thinner market, with a different shortlist.
Key Takeaways
- ✓Commercial DSCR is a different product from residential 1–4 unit DSCR — different underwriting (NOI ÷ PITIA, not rent ÷ PITIA), different appraisal (income approach, not comps), and different lender pool.
- ✓Fewer lenders publish dedicated commercial DSCR programs than residential, and pricing is less transparent. Expect to talk to lenders directly rather than shop off a published rate sheet.
- ✓The strongest commercial DSCR programs come from non-bank specialty lenders that also operate in the residential DSCR space — Lima One, Visio, CoreVest, Velocity Mortgage, and RCN Capital are common starting points.
- ✓Agency multifamily lenders (Arbor, Greystone, Berkadia) compete at the upper end on 5+ unit deals — but with full commercial underwriting, longer timelines, and a $1M+ effective floor.
- ✓For mixed-use properties, the question to ask first isn't 'who lends' but 'what's the residential income share?' Most commercial DSCR programs require 50%+ residential income.
If you've outgrown 1–4 unit residential DSCR loans — or you're staring at a 5+ unit deal for the first time — the lender pool you've been using doesn't follow you across the cliff. The mainstream residential DSCR lenders close their files at four units. Commercial DSCR is a separate product, with a separate (and smaller) lender market, and the way you shop it is different too.
This post is about who actually funds commercial DSCR — 5+ unit multifamily, mixed-use, and small commercial — and how to think about the shortlist when there are fewer transparent programs to compare. If you want the mechanics of the loan itself, the DSCR loan for multifamily property post covers the 5-unit cliff in detail. This one is about lenders.
Field Note
The first time I tried to finance a 6-unit deal, I called the same lender that had funded my fourplex. They referred me to their "commercial desk." The commercial desk was a single underwriter with a six-week queue, terms I hadn't seen before (1.20 DSCR floor, 70% LTV, NOI-based math), and a rate sheet that wasn't posted anywhere on the website. I'd assumed commercial DSCR was just bigger residential DSCR. It wasn't. It was a different product priced through a different channel, and the shortlist of lenders I needed to call had almost no overlap with my residential rolodex.
What Makes a Lender a "Commercial DSCR Lender"
Two product features separate commercial DSCR from residential DSCR:
The DSCR formula uses NOI, not gross rent. Residential DSCR runs Rent ÷ PITIA. Commercial DSCR runs NOI ÷ PITIA — where NOI subtracts vacancy, management, maintenance, and capex reserves from gross rent first. A property at a 1.45 residential DSCR routinely lands at 1.15–1.20 once converted to commercial NOI.
The appraisal uses the income approach. A 5+ unit property is valued by capitalizing its NOI (NOI ÷ cap rate), not by comparing it to recent sales. The appraisal is partly an opinion on rents and partly an opinion on the local cap rate — both of which the lender's appraiser controls.
A "commercial DSCR lender" is one whose program is built around those two facts. That includes both specialty non-bank lenders that also run residential DSCR programs (their commercial program is a separate product behind a separate underwriting team) and pure-commercial specialty lenders that don't do 1–4 unit at all.
The Commercial DSCR Lender Pool
The market is thinner than residential DSCR. Most lenders publish less, quote on a per-deal basis, and concentrate in different segments. The starting set of lenders worth calling falls into three groups:
| Category | Examples | Typical sweet spot |
|---|---|---|
| Non-bank specialty (does both residential + commercial DSCR) | Lima One Capital, Visio Lending, RCN Capital, Silver Hill Capital, LendSure Home Loans | 5–20 unit multifamily, $150K–$3M loan range, mixed-use with majority residential |
| Pure-commercial specialty | CoreVest, Velocity Mortgage Capital | Small-balance commercial DSCR; portfolio loans across multiple properties |
| Agency / institutional multifamily | Arbor, Greystone, Berkadia (Fannie Small Loan / Freddie SBL) | 5+ unit multifamily, $1M+ effective floor, lowest rates but longest timelines |
A note on the SERP: search "commercial dscr lenders" and a chunk of the top results are actually generic residential DSCR pages catching the keyword indirectly. The market for true small-balance commercial DSCR — 5+ unit and mixed-use — is meaningfully thinner than the search volume suggests. Silver Hill Capital and LendSure are two that genuinely publish dedicated 1–4 and commercial programs and show up in commercial-specific searches; both are worth calling.
The lenders in row one are the most accessible — they publish program sheets, take direct inquiries, and close in 30–45 days. Row two skews larger and is often reached through a broker. Row three (agency multifamily) competes on rate at the upper end but requires full commercial underwriting and is rarely the right answer below $1M.
Run your scenario first
A commercial DSCR lender is worth calling once your scenario penciled — start with the calculator.
Run your numbers in the DSCR calculator, then get matched with the best DSCR lender for your scenario.
How to Shop a Thinner Market
The residential DSCR playbook — quote three lenders, compare rate and overlays, pick the best fit — partly breaks down on commercial. Two adjustments:
Expect to talk to humans. Most commercial DSCR programs don't publish enough to let you shop on paper. A real comparison requires sending the deal file to two or three lenders and asking for an actual indicative quote. The 24–48 hour turn is normal; a fully-published rate sheet usually isn't.
Use a commercial DSCR broker for the unusual deals. A broker who specializes in small-balance commercial DSCR sees programs that aren't visible to a direct investor — relationship-based desks, niche portfolio programs, hybrid commercial-bridge products. For a standard 6-unit purchase, going direct to two of the row-one lenders is fine. For a 12-unit mixed-use with retail downstairs and a quirky entity structure, a broker often surfaces the lender that says yes.
The direct vs broker tradeoff covers this in more depth, and the choosing a DSCR lender post covers the general comparison framework — most of it carries over.
What to Compare on a Commercial DSCR Quote
The headline rate matters less than these five line items:
- NOI assumption. What vacancy rate, management fee, and maintenance reserve is the lender using to compute NOI? A 5% vacancy assumption vs 8% changes your DSCR meaningfully.
- DSCR floor. Commercial floors are higher than residential — typically 1.15 to 1.25. The premium-pricing threshold is often 1.30+, not 1.25+.
- LTV cap. 70% is standard on commercial DSCR purchase; some programs cap at 65%. Cash-out refi typically caps lower still.
- Reserves. Often quoted as months of PITIA (6 to 12) or as a percentage of loan amount (5–10%). Confirm which.
- Prepayment penalty structure. Step-down, fixed-percentage, and yield maintenance are all common. Yield maintenance can effectively lock you in for the loan's full term if rates drop.
The lender that wins on rate alone often loses on one of these other lines. Compare the full term sheet, not the headline.
Mixed-Use: The Residential-Income Test
Mixed-use is its own corner of the market. A property with apartments above ground-floor retail can qualify for commercial DSCR — but most programs require that residential income exceed 50% of total rent. A building with one small storefront and four apartments above usually qualifies. A building with three storefronts and two apartments above usually doesn't, and gets pushed to pure-commercial financing with a different lender pool entirely.
Some lenders publish the threshold as a hard rule; others underwrite it case-by-case. If the property is close to the 50% line, ask the lender how they compute the split (square footage, rent, or appraised value) before submitting — the answer determines whether you have a DSCR deal or a small-balance commercial deal.
Frequently Asked Questions
FAQ
Are commercial DSCR loan rates higher than residential DSCR?+
Typically yes, by 50–150 basis points, depending on the size and risk profile of the deal. The exception is agency multifamily (Fannie Small Loan, Freddie SBL), which can price below residential DSCR on $1M+ loans — but with full commercial underwriting and a slower close.
Can I get a commercial DSCR loan in an LLC?+
Yes — commercial DSCR programs require an entity in most cases. LLC is standard; some lenders accept LP or corp structures. The personal guarantee question varies: many small-balance commercial DSCR programs are non-recourse, which is one of the meaningful upgrades over a personally-guaranteed residential DSCR.
What's the minimum loan amount for commercial DSCR?+
Most non-bank specialty programs start at $250K to $500K. A few residential DSCR lenders extending into 5–8 unit will go down to $150K. Below that, the lender economics typically don't work and you'll be pushed to a local bank or a portfolio lender instead of a DSCR program.
Do commercial DSCR lenders fund out-of-state borrowers?+
Almost all of them, yes. The constraint is the property location, not the borrower's address. The same residential-DSCR pattern of state coverage applies — most major lenders fund in 40+ states, with a handful of exclusions (often NY, ND, VT, and SD).
Can I do a cash-out refinance on a commercial DSCR loan?+
Yes, but the LTV cap on a commercial cash-out is meaningfully tighter than on a purchase — often 65% versus 70%, sometimes 60%. The DSCR floor is also often higher on cash-out. Plan to leave more equity in the deal than you would on a residential cash-out.
Pick a Lender That Already Speaks Commercial DSCR
The biggest unforced error on a 5+ unit deal is calling the residential DSCR lender that funded your fourplex and treating their commercial desk as a continuation. It's a different product, on a different desk, with a different rate sheet — and starting from a shortlist of lenders that actually specialize in commercial DSCR saves the four weeks you'd otherwise spend learning that the hard way.
Start with the numbers
Run the deal first, then take the result to commercial DSCR lenders that fund your scenario.
Run your numbers in the DSCR calculator, then get matched with the best DSCR lender for your scenario.
Written by
Roy
Foreign national investor. Built a $4M US rental portfolio using the BRRRR method, funded entirely with DSCR loans — remotely from abroad. Built DSCRLens because no honest, non-conflicted DSCR tool existed when he needed one.
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