Does Grafton Funding offer DSCR loans for rental properties?

Yes — DSCR (Debt Service Coverage Ratio) loans are our most popular product. We lend on single-family rentals, 2–4 unit properties, short-term rentals (like Airbnb and VRBO), and small multifamily up to 10 units. We qualify the property on its rental income rather than your personal income or tax returns. Minimum DSCR is typically 1.0x, and we lend in TX, FL, GA, NC, SC, and other states.

Does Grafton Funding do fix and flip loans or bridge loans?

Yes. We provide fix and flip loans and bridge loans for non-owner occupied investment properties. Our programs cover the purchase price plus rehab costs, with fast closings. Loan terms are short-term (typically 12–18 months) and are designed around the investor's exit strategy — either sale or refinance.

Can I get a DSCR loan for an Airbnb or short-term rental property?

Yes — we specialize in short-term rental (STR) financing. We use either the property's actual Airbnb or VRBO income history or a market-rate STR income estimate to qualify the loan. You don't need W-2s or tax returns.

Does Grafton Funding offer new construction loans for investment properties?

Yes. We offer new construction loans for non-owner occupied residential investment properties, including spec builds, ground-up construction, and lot + build projects. These are short-term loans that fund in draws as construction progresses.

Does Grafton Funding lend in North Carolina?

Yes — we actively lend in North Carolina, including the Charlotte metro, the Triangle (Raleigh/Durham/Chapel Hill), Wilmington, and Asheville. We offer DSCR rental loans, fix and flip loans, and new construction financing for NC investment properties. Local NC line: (910) 218-1286.

Can I qualify for a loan without showing tax returns or personal income?

Yes — our DSCR loans are underwritten based on the property's rental income, not your personal income or tax returns. This makes them ideal for self-employed investors and business owners. We do require a credit check and down payment, but there's no traditional income verification.

What credit score do I need to get a loan from Grafton Funding?

For most DSCR rental loan programs, we generally look for a minimum credit score in the 660–680 range, though this can vary by program and loan-to-value. Fix and flip loans may have different requirements depending on experience and deal strength.

How much do I need to put down for a DSCR loan?

For DSCR rental loans, we typically lend up to 75–80% loan-to-value (LTV), meaning you'd need 20–25% as a down payment. The exact LTV depends on the property type, DSCR ratio, and your credit profile. We lend exclusively on non-owner occupied investment real estate.

How quickly can Grafton Funding close a loan?

Many of our transactions close in 2–4 weeks depending on the loan type, property, and how quickly documentation is provided. We prioritize responsive communication and efficient underwriting for investors who need to move fast on deals.

Does Grafton Funding work with first-time real estate investors?

Yes — we work with both new and experienced investors. For DSCR rental loans, first-time investors are welcome as long as the property cash flows and the borrower meets our credit and down payment requirements. For fix and flip loans, some experience is preferred but not always required.

Multi-Family vs. Single-Family Investment Loans: What's the Difference?

2 days ago
5 min read

One of the most common questions new and intermediate real estate investors ask is whether to focus on single-family homes or multi-family properties — and how financing differs between the two.

The answer affects your loan options, down payment requirements, interest rates, and long-term portfolio strategy.

Quick Answer: Single-family properties (1 unit) and small multi-family (2–9 units) are financed with the same loan products — DSCR loans, conventional loans, fix & flip loans. Properties with 10 or more units cross into commercial lending and use a different underwriting framework. DSCR loans are available for 1–9 unit properties without personal income documentation; 10+ unit properties use commercial loan structures.

How Lenders Define Multi-Family

Residential multi-family (2–4 units):

Duplexes, triplexes, and fourplexes are classified as residential properties for lending purposes. They qualify for the same loan products as single-family homes — including DSCR loans, conventional loans, and FHA loans (for owner-occupants). The underwriting process is the same.

Commercial multi-family (5+ units):

Properties with 5 or more units cross into commercial real estate lending. They use commercial underwriting guidelines, different loan structures, and typically require more equity and documentation. Non-QM DSCR loans don't apply in the same form — though DSCR analysis (net operating income divided by debt service) is still used commercially.

Financing a Single-Family Investment Property

A single-family home is the simplest investment property to finance. It has the largest pool of available lenders, the most competitive rates, and the most straightforward underwriting.

Typical DSCR loan parameters:

Down payment: 20–25%
Credit score: 640+
DSCR: 1.0+

Advantages of single-family for financing:

Largest buyer pool if you need to sell (easier exit)
Lower entry price (easier to accumulate more properties)
Management is simpler (one tenant, one unit)

Disadvantages:

One vacancy = zero income
Lower per-door efficiency at scale

Financing a 2–4 Unit Multi-Family Property

Duplexes, triplexes, fourplexes, and multi-family up to 9 units, offer a compelling middle ground: residential financing with multiple income streams.

The DSCR calculation uses the total rental income from all units. A duplex generating $3,000/month in total rent with a $2,200/month mortgage payment has a DSCR of 1.36 — well above most lender minimums.

Typical DSCR loan parameters:

Down payment: 20–25% (same as single-family)
Credit score: 640+
DSCR: 1.0+ on the combined unit rents

Advantages of 2–4 unit multi-family:

Multiple income streams — one vacancy doesn't wipe out all revenue
Higher DSCR ratios possible (more total rent relative to loan size)
FHA financing available if you live in one unit (3.5% down)

Disadvantages:

Higher purchase price relative to single-family in the same market
More complex management (multiple tenants)

Ready to Finance Your Investment Properties?

Review DSCR loan options for single-family and 2–9 unit multi-family investment properties nationwide.

View DSCR Loan Programs

Financing 10+ Unit Multi-Family Properties

Once you cross into 10 units, you're in commercial lending territory. This changes the financing dramatically.

Commercial multi-family loan structure:

Lenders underwrite based on the property's net operating income (NOI), not personal income
Loan-to-value is typically 65–75% for investment
Terms are often shorter (5–10 year fixed periods with 20–30 year amortization)
Larger down payments and reserves are typical

Commercial lenders still use DSCR as a key metric — they calculate NOI divided by annual debt service, with requirements often at 1.20–1.25. The non-QM DSCR loan products designed for residential (1–9 unit) investment properties are a separate product category.

Side-by-Side Comparison

Factor	Single-Family	2–9 Unit Multi-Family	10+ Unit Commercial
Loan type	DSCR, conventional	DSCR, conventional, FHA	Commercial, portfolio
Down payment	20–25%	20–25% (FHA: 3.5%)	25–35%
DSCR calculation	1 unit's rent	Combined unit rents	NOI / annual debt service
Vacancy risk	100% if vacant	Spread across units	Spread across units
Management complexity	Low	Moderate	High

Which Strategy Is Right for Your Portfolio?

Start with single-family or small multi-family if:

You're in your first 1–3 years of investing
You want to finance with DSCR loans (most flexible option)
You value simplicity in management and exit options

Consider 2–9 unit multi-family if:

You want multiple income streams from a single loan
You're willing to owner-occupy one unit (FHA financing with 3.5% down)
You've already built experience with single-family management

Look at 10+ unit commercial when:

You have a strong equity base and want to scale efficiently
You have a property management system in place

Many experienced investors hold a combination of single-family DSCR rentals, small multi-family, and eventually commercial multi-family. DSCR loans make it straightforward to build the residential side (1–9 units) without hitting conventional loan limits.

Bottom Line

Single-family (1 unit) and small multi-family (2–9 units) use the same DSCR loan products; 10+ units cross into commercial lending
DSCR loans are available for 1–9 unit residential investment properties with no personal income documentation
2–9 unit properties allow FHA financing (3.5% down) if you owner-occupy one unit — a significant advantage for new investors
Down payment requirements are generally the same for single-family and 2–9 unit DSCR loans: 20–25%
The right strategy depends on your capital base, experience level, and investment objectives

Frequently Asked Questions

Can I use a DSCR loan for a duplex, triplex, or fourplex?

Yes. DSCR loans are fully available for 2–9 unit multi-family properties. The DSCR calculation uses the combined rental income from all units. A duplex with two $1,500/month units ($3,000 total) against a $2,000/month mortgage payment has a DSCR of 1.5 — well above most minimums.

Do I need more than 20% down for a multi-family DSCR loan?

Generally no. Down payment requirements for 2–9 unit properties with DSCR loans are typically the same as for single-family properties — 20–25%. Some lenders may require slightly more for larger unit counts or first-time borrowers, but 20% is the standard starting point.

What happens when a property crosses from 9 units to 10 units in terms of financing?

Crossing from 9 to 10 units is a significant threshold. Properties with 10 or more units are classified as commercial real estate and use commercial underwriting guidelines — including larger down payments (typically 25–35%), commercial loan structures, and different rate benchmarks. Non-QM DSCR products designed for residential investment do not apply to 10+ unit properties.

Can I buy a duplex and live in one unit as my primary residence?

Yes — and this opens up FHA financing, which allows as little as 3.5% down if you owner-occupy one unit. This is a powerful strategy for first-time buyers who want to house-hack while building equity. Note: You cannot use a DSCR loan for owner-occupied properties — DSCR loans are for non-owner-occupied investment properties only.

Which is easier to finance — single-family or small multi-family?

Single-family properties are generally the easiest to finance. They have the largest pool of available lenders, the most competitive rates, and the most straightforward underwriting. Small multi-family (2–9 units) use the same DSCR loan products with similar requirements — though rates may be slightly higher at some lenders for 3–4 unit and 5+ unit properties.

Ready to Finance Your Investment Properties?

Grafton Funding offers DSCR loans for single-family and 2–9 unit multi-family investment properties nationwide. Whether you're buying your first duplex or adding to an existing portfolio, we can structure the right loan for your deal.

Start Your Pre-Qualification