Fourplex
A residential building with four separate living units — the largest property still classified as residential.
Definition
A fourplex contains four independent residential units and represents the maximum unit count that still qualifies for residential (non-commercial) financing. This is a critical threshold because residential loans offer lower rates, longer terms, and simpler underwriting than commercial loans. Four units provide strong income diversification — even with one vacancy, 75% of income continues. Fourplexes are highly sought after by investors for their combination of residential financing terms and solid cash flow potential. Properties with five or more units cross into commercial territory with different lending requirements.
How This Relates to DSCR Loans
Fourplexes are the largest properties eligible for residential DSCR loans. Four income streams typically produce excellent DSCRs, making these properties popular with DSCR borrowers.
Related Terms
Duplex
A residential building with two separate living units, either side-by-side or stacked.
Triplex
A residential building with three separate living units.
Multifamily
Residential properties with multiple units, ranging from duplexes to large apartment complexes.
DSCR (Debt Service Coverage Ratio)
A ratio that measures whether a property's rental income covers its debt payments.
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