Houston lender recommendations for small multifamily at 67% occupancy

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Houston lender recommendations for small multifamily at 67% occupancy

Josefine SemeliusPro Member
Redondo Beach, Los Angeles County · Member since 2024 · 1 post · 2 votes

Hi

I’m looking for lender recommendations for a small multifamily acquisition in Houston.

The property is a 6-unit building that is currently 4/6 occupied. The two vacant units are rentable, but the seller is not willing to lease them before closing, so the property will likely still be at approximately 67% occupancy when we close.

I’m exploring alternatives to traditional financing and would especially like to speak with a local/community bank, portfolio lender, credit union, or commercial lender who is comfortable with small multifamily properties that are not fully stabilized.

Ideally, I'm looking for a lender who could take the lease-up potential/market rents into consideration rather than underwriting solely on the current in-place NOI.

If anyone has worked with a good Houston-area lender on a similar 5–15 unit property, I would really appreciate an introduction or recommendation.

Thank you!

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Austin GoetzBusiness Member
Lender · Minneapolis, MN · Member since 2026 · 33 posts · 10 votes
3w

Qualifying using a DSCR loan might be what you are looking for depending on the size of the purchase price/loan amount. We can do DSCR loans up to 9 units. We can also use 75% of market rents on the two vacant units to help with the DSCR ratio for qualification. Feel free to reach out with other questions.

[email protected]952-797-2007
Magnolia Bank
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  • Austin GoetzBusiness Member
    Lender · Minneapolis, MN · Member since 2026 · 33 posts · 10 votes
    3w

    Qualifying using a DSCR loan might be what you are looking for depending on the size of the purchase price/loan amount. We can do DSCR loans up to 9 units. We can also use 75% of market rents on the two vacant units to help with the DSCR ratio for qualification. Feel free to reach out with other questions.

    [email protected]952-797-2007
    Magnolia Bank
    WebsiteView Page
    2Reply
  • Joe Piccirello
    Lender · Peoria, AZ · Member since 2026 · 30 posts · 10 votes
    3w

    For a Houston 6-unit closing around 67% occupied, local community banks, credit unions, and portfolio lenders are usually more workable than agency-style debt. They can sometimes underwrite to a lease-up plan and market rents on clearly rentable vacant units instead of in-place NOI only.

    When you shop, ask each lender upfront:

    1) Do they give credit for the two vacant units at market rent, or in-place only?

    2) What are their minimum occupancy and DSCR at close on 5 to 15 unit deals?

    3) Do they require a lease-up reserve or rate holdback until those units are leased?

    Start with a few early quotes from Houston-area portfolio lenders and credit unions that already do small multifamily, so you can compare how each one treats the vacancies.

    If you can share a rough purchase price band and whether you plan to stabilize and then refinance later, folks here can narrow the lender types further.

    1Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    2w

    @Josefine Semelius

    For instance, in the case of 6 units in Houston which have an occupancy rate of 4/6, I would think out of the box by getting in touch with a bank, credit union, or a commercial lending company that is well aware of small multifamily properties. The right lease up plan, proper rent comparisons and the pro forma with conservative figures indicating how these two vacant units finance the debt will give more information to the lender than NOI.

    Good luck!

    [email protected]832-776-9582Podcast Guest on Show #469
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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 516 votes
    2w

    If two vacancies, this could work for a DSCR loan program. Happy to connect to discuss further.

    [email protected]818-770-0340
    Bright Skyline518 Reviews
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    1Reply
  • Harry B.Pro Member
    Lender · New York, NY · Member since 2026 · 71 posts · 23 votes
    2w

    There's some nuance that needs clarification before answering this general question pertaining to fico, experience and liquidity! I'll try to reach out for a quick private discussion!

    [email protected]917-348-2846
    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2w

    Hi - @Zach Edelman at Harpoon Capital can do a solid DSCR Multifamily option for this, 2 vacant units will likely not be an issue. A bit higher rate, but can get 30-year fixed and likely IO so should be a better monthly payment than a traditional multifamily CRE Loan

    [email protected]
    Harpoon Capital514 Reviews
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  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    2w

    Yes, this 6 unit can qualify for dscr and market rents for the 2 vacant units (assuming they are tenant ready).

    0Reply
  • Chad Davis
    Lender · Richmond VA · Member since 2012 · 313 posts · 33 votes
    2w

    @Josefine Semelius Options are certainly available and people on this forum have bought up great points.

    Also happy to take a look.

    0Reply
  • Renard BrownPro Member
    Austin, TX · Member since 2026 · 55 posts · 6 votes
    2w

    @Josefine Semelius

    Hi happy to learn more. Let's connect

    0Reply
  • Omoefe O.
    Investor · Member since 2024 · 7 posts · 2 votes
    2w
    0Reply
  • Darren KurilkoPro Member
    Lender · Venice, FL · Member since 2025 · 23 posts · 1 vote
    2w

    Hi Josefine, We may have a bridge financing option while you lease up the remaining units. A few questions:

    • What’s the property address and purchase price?

    • Why are the two units vacant—is the seller simply choosing not to rent them, or is there another issue?

    • Do either units need any rehab?

    • Do you own any other real estate?

    • What’s your approximate credit score?

    Feel free to send me the details privately, and I can see what options might fit.

    Best,

    Darren Kurilko

    SizzleCapitalGroup.com

    DarrenFundsStartups.com

    941-800-8534 call/text

    Venice, Florida

    "We specialize in impossible situations."

    0Reply
  • Zury Hamoui
    Greater Houston · Member since 2026 · 7 posts · 3 votes
    2w

    Hey Josefine, lots of lenders in here already, so here's something that isn't a pitch.

    Before you talk to any of them, get your real Houston costs on paper:

    -1 An actual insurance quote. Wind and flood can run way higher here than people expect.
    -2 The property tax you'll pay after you buy, not what the seller pays today. The seller's bill can be lower until the county catches up to the sale price.

    -3 Whether it's in a MUD or a flood zone.

    DSCR is basically rent divided by the full payment, so those numbers decide what you can borrow. Know them first and you'll see where you land before underwriting does, and you can compare these offers on the same numbers.

    Happy to help you pull the Houston costs together for the 6-unit so you can compare those offers side by side!

    1Reply
  • Jiao Liu
    Lender · Houston, TX · Member since 2026 · 44 posts · 11 votes
    2w

    On a 6-unit, 67% occupied is just two vacant units — a routine lease-up. Houston portfolio lenders and credit unions do 5–15 unit deals like this regularly, and they underwrite the vacant units at market rent instead of treating them as permanent zeros. A DSCR loan can work the same way if the totals hold up. If you share the purchase price and the rent roll, the numbers will say pretty quickly which route fits — happy to sanity-check them.

    0Reply
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