Best rates for South Dakota multifamily (under 4 units)

Member since 2025 · 31 posts · 21 votes

I've been working with a few lenders shopping rates for DSCR (1.5+) for LTR in South Dakota, including a couple of local banks and two national lenders (ex. DreamPoint Capital). These are for multifamily <= 4 units. Best rates so far around 6.5 - 6.675%. My credit rating is exceptional, solid property 100% occupied and I have cash reserves. Feedback from lenders is that there aren't any really good programs for South Dakota. Could I do better or should I be happy with these rates?

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Vontay Callahan

Real Estate Broker · Lincoln, NE · Member since 2026 · 64 posts · 12 votes

5mo

Mark, those numbers line up with what I'm seeing right now for South Dakota. Even with strong credit, full occupancy, and solid reserves, lenders are pricing SD a bit higher because it's a smaller, lower‑volume market and most national DSCR programs don't have aggressive incentives there. The 6.5–6.675% range you're getting quoted is consistent with what investors are reporting across similar DSCR updates.

One thing that can help is comparing programs that weigh DSCR more heavily than geography — some lenders will price more favorably when you're above a 1.5 DSCR, even in smaller states. If you want, I can take a look at the deal metrics and see if there are any lenders in my network offering better pricing for 1–4 unit multifamily in SD right now.

Happy to help you shop it around if you’re still exploring options.

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Vontay Callahan
Real Estate Broker · Lincoln, NE · Member since 2026 · 64 posts · 12 votes
5mo
Mark, those numbers line up with what I'm seeing right now for South Dakota. Even with strong credit, full occupancy, and solid reserves, lenders are pricing SD a bit higher because it's a smaller, lower‑volume market and most national DSCR programs don't have aggressive incentives there. The 6.5–6.675% range you're getting quoted is consistent with what investors are reporting across similar DSCR updates.

One thing that can help is comparing programs that weigh DSCR more heavily than geography — some lenders will price more favorably when you're above a 1.5 DSCR, even in smaller states. If you want, I can take a look at the deal metrics and see if there are any lenders in my network offering better pricing for 1–4 unit multifamily in SD right now.

Happy to help you shop it around if you’re still exploring options.
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Mark Soreco
OP
Member since 2025 · 31 posts · 21 votes
5mo
Thanks Vontay, if you've got the cycles to take a look I'm up for it.
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- Vontay Callahan
  Real Estate Broker · Lincoln, NE · Member since 2026 · 64 posts · 12 votes
  5mo
  Quote from @Mark Soreco:
  
  Thanks Vontay, if you've got the cycles to take a look I'm up for it.
  
  I can take a look here shortly or we can set up a time to go over them together as well I can even send your numbers to my brokerage and see if they might be able to get you something better if you would like too.
  
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Mark Soreco
OP
Member since 2025 · 31 posts · 21 votes
5mo
If you can take a quick look first that would be great.
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- Vontay Callahan
  Real Estate Broker · Lincoln, NE · Member since 2026 · 64 posts · 12 votes
  5mo
  Quote from @Mark Soreco:
  
  If you can take a quick look first that would be great.
  
  I can do that i would just need some numbers like credit score and the rental details property value purchase price and expected monthly rent then is it a commercial property
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Nyron Isaac
Member since 2024 · 144 posts · 27 votes
3mo
You should absolutely lock those rates in. For a small multifamily asset (<= 4 units) located in South Dakota, a 6.5% to 6.675% DSCR rate is a phenomenal quote.
National DSCR secondary markets penalize lower-density states with a geographic tier premium, and multifamily units inherently carry a minor pricing adjuster compared to single-family rentals. The only reason your rates are this low is because your top-tier credit and strong 1.5+ DSCR ratio pushed you into the absolute highest premium pricing bucket. You have already optimized this deal as much as the current market allows; local banks or national groups like DreamPoint are handing you an exceptional win
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- Mark Soreco
  OP
  Member since 2025 · 31 posts · 21 votes
  3mo
  Quote from @Nyron Isaac:
  
  You should absolutely lock those rates in. For a small multifamily asset (<= 4 units) located in South Dakota, a 6.5% to 6.675% DSCR rate is a phenomenal quote.
  National DSCR secondary markets penalize lower-density states with a geographic tier premium, and multifamily units inherently carry a minor pricing adjuster compared to single-family rentals. The only reason your rates are this low is because your top-tier credit and strong 1.5+ DSCR ratio pushed you into the absolute highest premium pricing bucket. You have already optimized this deal as much as the current market allows; local banks or national groups like DreamPoint are handing you an exceptional win
  Thanks Nyron, we were able to work with a local bank to get 6.125% with 1% origination plus 1 point, fixed with initial interest only period, 3 year prepay. Worked perfectly for our situation. There was one national broker who could have matched that but a couple of the fees were higher and I liked the idea of building a relationship with a local bank.
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Vijay FriedmanBusiness Member
Miami, FL · Member since 2026 · 766 posts · 122 votes
3mo
Quote from @Mark Soreco:

I've been working with a few lenders shopping rates for DSCR (1.5+) for LTR in South Dakota, including a couple of local banks and two national lenders (ex. DreamPoint Capital). These are for multifamily <= 4 units. Best rates so far around 6.5 - 6.675%. My credit rating is exceptional, solid property 100% occupied and I have cash reserves. Feedback from lenders is that there aren't any really good programs for South Dakota. Could I do better or should I be happy with these rates?

@Mark Soreco
With a 1.5+ DSCR, strong credit, full occupancy, and solid reserves, you've already got a strong borrower profile. South Dakota can have a smaller pool of investor lenders, so the best available pricing isn't always as aggressive as larger markets. I'd compare not only the rate, but also points, lender fees, prepayment terms, and execution certainty before deciding. Were the quotes you received all based on the same LTV and loan structure?
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