Michigan DSCR program
2-4 unit DSCR loans in Michigan
Quick answer
A 2-4 unit DSCR loan finances a Michigan duplex, triplex or fourplex based on the combined rent of all units compared with the property’s full monthly payment. Michigan has deep stock of older two-flats and converted houses, so insurance, inspections and unit-by-unit lease documentation matter as much as the ratio.
Where Michigan’s small multifamily stock sits
Older neighborhoods in Grand Rapids, Kalamazoo, Lansing, Detroit and many smaller cities have up-and-down duplexes and large houses converted into several units. They let investors spread vacancy risk across more than one tenant while staying within residential-style DSCR programs.
Converted buildings need extra attention: confirm the units are legal under local zoning, that each has proper egress and that the city recognizes the unit count. Lenders and appraisers will check.
How lenders count the rent
The appraiser completes a rent schedule for each unit. Lenders compare the leases with market rent and typically use the lower figure per unit. Vacant units are usually counted at market rent if the property is rent-ready. The combined rent is then divided by the PITIA.
| Example | Amount |
|---|---|
| Unit A rent | $1,050 |
| Unit B rent | $975 |
| Combined monthly rent | $2,025 |
| Example PITIA | $1,610 |
| DSCR (2,025 ÷ 1,610) | 1.26 |
Illustrative arithmetic only; not a loan offer or pricing estimate.
Local inspection and registration programs
Many Michigan cities run rental registration or inspection programs, and multi-unit buildings often get more scrutiny. In Detroit, buildings with three or more units schedule inspections with the city’s buildings department, while one- and two-unit rentals use approved third-party inspectors. Check the city where your building sits before closing.
Questions investors ask
Can I live in one unit of a Michigan duplex with a DSCR loan?
Not through this site. We arrange business-purpose loans for non-owner-occupied property only, so no unit can be your residence.
Have a Michigan rental in mind?
Send the address, the rent and the uncapped tax estimate. We shop the scenario with wholesale lenders and come back with options that fit the property.