I help investors get rental property loans on Long Island and across downstate New York, comparing programs from the lenders I work with. The building decides the loan, so start with what you’re buying.
- A 1–4 family rental is usually financed with a residential investor loan, and rental income can help you qualify.
- DSCR loans, which qualify on the property's cash flow instead of your tax returns, are a common alternative.
- Five or more units and most mixed-use buildings move into commercial underwriting with shorter terms.
- Fix-and-flip financing is short-term, priced differently and judged on your exit plan.
Loans for 1–4 family rental property
Anything from a single-family rental to a four-family building is still residential financing. Expect a larger down payment than you would need for a home you live in, and expect the lender to want reserves left over after closing. Market rent, supported by a lease or an appraiser's rent schedule, can usually help you qualify.
On Long Island, the two-family house is the workhorse. If you live in one unit, you are buying a primary residence, which opens up better terms and much smaller down payments. The same building bought as a pure rental is priced as an investment. Same house, very different loan.
When a DSCR loan is the better fit
A DSCR (debt service coverage ratio) loan qualifies you based on the property's rental income: the lender divides the expected monthly rent by the monthly PITIA payment (principal, interest, taxes, insurance and any association dues). You can estimate that payment for a specific property with the mortgage payment calculator, which includes taxes, insurance and HOA dues.
If your tax returns show heavy write-offs, a DSCR loan can work when traditional income documentation won’t. Expect a bigger down payment and higher pricing than a conventional investor loan; it often closes in an LLC, and pricing moves with the market (here is why mortgage rates move).
For how lenders estimate rent, a DSCR calculator and the local permit rules, see my guide to DSCR loans on Long Island and in New York City.
Five or more units: multifamily, mixed-use and commercial loans
Once a building has five or more units, or a storefront under the apartments, it usually leaves residential underwriting. Commercial loans are judged on the building's income, expenses and condition. Terms are shorter than 30 years, many carry a balloon at the end, and the lender will want to see leases, a rent roll and operating history.
Plan for a longer process. Commercial deals involve more third-party reports and more back-and-forth, and the timeline is rarely the 30 to 45 days a house takes. In New York City, and in parts of Nassau, Westchester and Rockland, buildings with six or more units built before 1974 are often rent stabilized, and the lender will underwrite the legal regulated rents, not market rents.
Fix-and-flip and other short-term loans
Renovation projects are financed on a short clock, often twelve to eighteen months, with interest-only payments and rehab money released in draws as the work is completed. The lender is underwriting the project as much as the borrower: the purchase price, the renovation budget, the after-repair value and your plan to exit, whether that is a sale or a refinance into a long-term loan.
Experience helps. If this is your first project, a realistic scope and a contractor with a track record go a long way toward getting the deal approved.
What lenders look at on any investment property
- Your credit and the reserves you have after closing.
- The property's income, condition and the leases in place.
- Your experience with similar properties.
- A clear exit: hold and rent, refinance, or sell.
On Long Island, investors tend to focus on two- to four-family homes, houses with a legal accessory apartment and mixed-use buildings along village main streets. With all of them, local zoning and the certificate of occupancy matter: a unit that is not legal under town or village rules, or not reflected on the certificate of occupancy, may not be counted by the lender as rental income. Confirm the property's legal use before you build its rent into your numbers. Rules also vary by town: my Nassau County guide for investors explains why a Town of Hempstead mother-daughter approval is not a rental permit, and my Suffolk County guide to East End rental rules covers the permit and registry requirements in Southampton and East Hampton.
Rental property loans in New York City and Westchester
Most of my clients buy on Long Island, where the town rules above are the big local question. In New York City, Westchester, Rockland and Putnam the loan types are the same, and so are the 2026 conforming limits, up to $2,326,875 for a four-family (see my New York loan limits by county).
New York City’s five boroughs
Two- to four-family houses, common in Queens, Brooklyn, Staten Island and the Bronx, finance like any other 1–4 family rental. If you won’t live there, expect to register it with HPD every year and to rent long-term; see DSCR loans in New York City for the city rules.
Westchester, Rockland and Putnam
Westchester tax bills run high, like Long Island’s, so run the real bill before you trust the cash flow. Some cities and villages here have their own rental permit or inspection rules; check with the municipality before you count a unit’s rent.
Mistakes I see most often
Underestimating carrying costs during a renovation. Forgetting that Long Island property taxes can swallow the cash flow that looked fine on paper. Signing a contract before the financing structure is settled, then discovering the building does not fit the loan. Every one of those is avoidable with a conversation before you go under contract.
I own and manage rental property myself, so these are not abstractions to me. Send me the address, the rent roll and your plan for the property, and I will tell you how I would finance it.
Frequently asked questions
What kind of loan do I need for a rental property in New York?
It depends on the building. A one- to four-family rental usually gets a conventional investor loan or a DSCR loan. Five or more units and most mixed-use buildings need a commercial loan, and a flip usually uses short-term financing.
How do you finance a multifamily building on Long Island?
Two to four units is still residential financing, and if you live in one unit it’s a primary residence. Five or more units is a commercial loan, judged on the building’s income, expenses and condition, usually with shorter terms. Send me the address and the rent roll and I’ll tell you how I’d finance it.
Can I buy an investment property in an LLC?
Often yes, depending on the loan program. Conventional investor loans usually close in your personal name, while many portfolio and cash-flow-based programs allow an LLC.
Does rental income help me qualify?
Usually. Lenders typically count a portion of documented market rent or lease income, and the exact treatment depends on the program.
How much do I need to put down on a rental?
More than on a home you live in, and the exact amount depends on the program, the number of units and your credit. Call me with the specifics and I will give you real numbers.
This article is for general information only and is not a loan offer or commitment to lend. Program availability, terms and qualification requirements vary by lender and property, and are subject to change. All loans are subject to credit and property approval.