Maryland 2-4 Unit DSCR Loans for Duplexes, Triplexes and Fourplexes

How rent from multiple units is counted

The appraiser estimates market rent for each unit, and the lender may use existing leases where they are at market. The total is divided by the full payment. Example with your own figures: a Baltimore County duplex with units renting for $1,300 and $1,250 brings in $2,550 a month. If the full payment from your quote, taxes and insurance is $2,050, the DSCR is about 1.24.

Multi-unit buildings help in two ways. One vacancy does not wipe out the income, and the higher combined rent can lift the loan above the minimum loan amounts that some programs set, which matters in lower-priced areas such as Western Maryland.

Maryland-specific checks for small multifamily

• Legal unit count. Confirm with zoning and permits that the building is approved for the number of units you plan to rent.
• Licensing and inspections. Baltimore City inspects every unit in buildings of nine or fewer units for a rental license. See the Baltimore rental license guide.
• Lead-paint registration for each pre-1978 unit.
• Separate utilities. Lenders and appraisers note whether units are separately metered; shared utilities paid by the owner reduce net income.

Five units and up

Buildings with five to ten units usually move to small-balance commercial programs that look at the property's net operating income. They are still business-purpose loans, and the same broker process applies. See portfolio and small multifamily DSCR.