The loan you can get depends on one number: how many units are on the deed. Two to four units is a residential mortgage. Five or more is a commercial loan. Everything about the deal, from down payment to how rents count, changes at that line.
Two to four units: residential lending
A duplex, triplex, or fourplex is financed like a house, which is why they are the entry point for most Alaska investors.
- Owner-occupied, FHA: 3.5% down on up to four units if you live in one. The property must pass FHA’s self-sufficiency test on three- and four-unit buildings, meaning rents have to cover the payment. Alaska’s FHA loan limits are higher than the national baseline, so this covers most Mat-Su and Anchorage fourplexes.
- Owner-occupied, VA: zero down on up to four units for eligible veterans, one of the best deals in real estate. Alaska’s large military population makes this common here.
- Owner-occupied, conventional: as little as 5% down on a two- to four-unit primary residence under current Fannie Mae rules.
- Pure investment (you do not live there): conventional lenders want 20% to 25% down, and rates run somewhat higher than an owner-occupied loan.
How lenders count the rent
Residential lenders typically credit 75% of gross rent toward your qualifying income, using signed leases or the appraiser’s rent schedule. The other 25% is their allowance for vacancy and repairs. On a fourplex renting three units at $1,500 each, that is $3,375 a month added to your income for qualifying, which is often what makes the deal possible for a first-time investor.
Five or more units: commercial lending
At five units the loan is underwritten on the property’s income, not mainly yours. Expect:
- 25% to 30% down, sometimes more on older buildings.
- A debt-service coverage ratio requirement, usually 1.20 to 1.25, meaning net operating income must be at least 20% to 25% above the annual loan payment.
- Shorter terms: five-, seven-, or ten-year fixed periods with a balloon or reset, on a 20- to 25-year amortization.
- A commercial appraisal and often an environmental review, both slower and pricier than residential.
- Personal guarantees on most bank loans under a few million dollars.
Alaska’s local banks and credit unions do the bulk of this lending and tend to know the submarkets. A lender who has financed buildings in Wasilla or Midtown Anchorage will underwrite faster than a national lender working from a spreadsheet.
Alaska-specific things lenders look at
- Heating costs. Underwriters want to know who pays heat. Landlord-paid heat on an older building can wipe out margin; separately metered units appraise and finance better.
- Well and septic. Common in the Mat-Su. Lenders require a water test and septic inspection; a failed septic can stall a closing for months in winter.
- Snow removal and seasonal vacancy. Expect these in the expense side of any commercial underwriting.
- Sale prices are not public. Alaska is a non-disclosure state, so the appraiser works from MLS data your agent can pull, not county records.
Commercial property (retail, office, warehouse)
Financing follows the commercial rules above, with more weight on lease quality: how long the tenants are committed, and whether they pay taxes, insurance, and maintenance (a “triple net” lease). Owner-users buying a building for their own business can look at SBA 504 and 7(a) loans, which go down to 10% and have long fixed terms.
Before you make an offer
- Get a real pre-approval from a lender that does the loan type you need, not a generic letter.
- Ask the seller for a rent roll, twelve months of expenses, and current leases before you write.
- Decide whether you will occupy a unit. It changes the down payment by up to 20 points.
- If you are selling another property to fund this one, read our 1031 exchange guide before you list.
Current inventory: duplexes, fourplexes, and all Alaska multi-family.
This article is general information for Alaska buyers, not tax, legal, or lending advice. Confirm the specifics with a qualified intermediary, CPA, or lender before you act.