Duplex, triplex, and fourplex construction loans fund a new 2–4 unit building — two, three, or four doors from dirt, not from a tired existing stack. Investors search “hard money duplex” and land on rehab. That is the wrong stack when the collateral is a vacant lot and a set of plans.
Jaken Finance Group funds qualified investor 2–4 construction nationwide at 8.99%–13.5% interest-only. Leverage is the lower of cost and 75% of as-completed value from 2–4 unit comps. Close targets 10–14 business days when title, plans, and the exit are already in the file. Stabilized rent exits toward DSCR at 5.75%–10.5%.
If the building is already standing, stop. Use how to finance duplexes, triplexes, and fourplexes with hard money. That guide is acquisition and rehab. This loan is vertical construction.
Apply for a new 2–4: new construction · submit a scenario · (833) 264-7776
What counts as 2–4 construction
This desk is residential new construction at two, three, or four units:
- A new side-by-side duplex on a legal lot
- A new three-flat or stacked triplex where zoning allows
- A new fourplex, including a small courtyard four-door
It is not a house hack you will occupy. We finance investment property only. It is not five or more doors — that is small multifamily construction (5–9) or multifamily construction (5–20). It is not four townhomes on four lots. That is townhome construction.
If the lot still has a house you will scrape, infill prices the demo path. Come back here for the vertical 2–4.
New 2–4 vs rehab 2–4 vs five-plus
| New 2–4 construction | Existing 2–4 hard money | 5–9 construction | |
|---|---|---|---|
| Collateral today | Lot + plans | Standing building | Pad + plans |
| Draws | Foundation through CO | Rehab milestones | Commercial-style vertical |
| Comps | New or renovated 2–4 sales and rents | ARV of similar 2–4 | Small MF sales and rents |
| Typical all-in | $450K–$1.1M | Purchase + rehab | Higher, more doors |
| Common miss | Using SFR comps | Using house-flip scope on four kitchens | Treating it as a fourplex |
Four units is the last door that usually stays in residential investor products. Crossing five changes appraisal, insurance, and often the takeout desk. Do not “add a basement unit” on paper to squeeze a fifth door into this loan.
Unit mix, meters, and the rent roll that does not exist yet
A new duplex is two rent stories. A new fourplex is four. Underwriting wants the mix in the drawings to match the mix in the pro forma.
Meters. Separate electric and gas are a lease and a DSCR issue. A single boiler serving four units is a landlord-paid utility line. Say which one you are building. Do not assume the city will let you split meters after CO.
Parking and entries. Two front doors on a 35-foot lot is not the same product as a rear-coach plus front house. Comps must match the layout.
Illegal fourth unit. If zoning is a legal triplex and the plans show four kitchens, we do not fund the fourth as rent. We fund what the city will CO.
Sound and fire. New 2–4 still needs rated assemblies between units. That is cost. A GC who only builds SFR will miss it.
HUD’s 1–4 unit settlement and construction guidance is written for a different borrower. We are a private construction desk. We still want a building that a future DSCR or agency-adjacent takeout can recognize as a legal 2–4.
Example: new fourplex on an infill lot
| Line | Amount |
|---|---|
| Entitled lot (already owned) | $140,000 |
| Vertical hard cost | $620,000 |
| Soft cost (plans, permits, taps, insurance) | $72,000 |
| Contingency (12% of hard) | $74,000 |
| Interest reserve (13 months @ ~10.5% on rising balance) | ~$58,000 |
| All-in | ~$964,000 |
| As-completed 4-unit comps | $1.12M |
| 75% of as-completed | $840,000 |
| Lower of cost vs value cap | $840,000 binds |
The sponsor used new SFR sales at $390,000 and multiplied by something. Fourplex comps on this grid support $1.12M, not $1.56M. The cap binds. Rent story: 4 × $1,650, 6% vacancy, taxes, insurance, 25% opex, then a takeout at 70%–75% of $1.12M. If that DSCR is under 1.0 at 5.75%–10.5%, the construction loan is not the fix. The rent or the cost is.
Interest-only during the build at 8.99%–13.5%. Term 12–18 months. Exit: sell the fourplex to an operator, or DSCR after lease-up.
A duplex example on the same lot would show lower hard cost and two-door comps. Do not reuse fourplex value on a two-unit plan.
What dies in underwriting
- SFR comps for 2–4 collateral. Different buyer, different financing, different price.
- Rehab packet on a vacant lot. Paint bids and a kitchen allowance are not a foundation-to-CO budget.
- Fifth unit in the basement that zoning will not CO.
- No meter or utility plan on a fourplex you plan to DSCR.
- Owner-occupy one side. Wrong lender.
- GC who has never pulled a multi-unit permit.
- Scrape with no demo path stuffed into a vertical request.
Permits and the 2–4 that the zoning map actually allows
Ask planning, not a wholesaler:
- By-right unit count. Two, three, or four — in writing.
- Parking minimums. A fourplex that needs five spaces on a pad that holds three is a redesign.
- Short-term rental rules if your exit assumes Airbnb on all four. Many cities split STR from long-term. Construction takeout on fantasy nightly rates fails.
If a variance is required for the fourth door, we want the application and the hearing date. We do not max leverage on a door that is still a request.
Takeout — sale vs DSCR vs the rehab cousin
Sale. Operators buy new fourplexes. Price it like a 2–4 sale, not like four condos unless you are actually recording condos — then use condo construction.
DSCR hold. After CO and leases, DSCR at 5.75%–10.5%. Construction takeout often sits at 70%–75% LTV on the new building. Do not model 85% purchase LTV on a building that just received a CO.
You thought you wanted construction, but a standing fourplex is under contract. Switch desks. 2–4 hard money and a rehab budget will close faster than pretending the acquisition is a ground-up.
A stalled fourplex frame is mid-construction refinance.
What “qualified” means on new 2–4
Flips in the same city help. A GC who has delivered duplexes or fourplexes in this permit office helps more. Liquidity for taps, soil, and a slipped inspection is not optional.
First-time sponsors with sealed plans, a four-kitchen budget that is actually four kitchens, and 2–4 comps can clear. First-time sponsors with a house plan and “we will add a second kitchen later” do not.
Credit is reviewed. Approval rides on cost, 2–4 value, GC, and exit — not on a W-2 story.
Insurance and carry on a vacant new fourplex
Course-of-construction insurance is not four SFR policies. At CO, a 2–4 dwelling policy or a small-multifamily binder replaces it. Get both quotes. Landlord-paid heat on a new fourplex will show up in DSCR. If you are installing four furnaces, say so. If you are installing one boiler, say so and raise operating expense.
Lease-up on four new doors is shorter than on twelve, and still not zero. A November CO in a college grid does not lease like a June CO. Reserve a real vacancy tail.
Draw schedule that matches 2–4, not a house flip
Typical gates: site and foundation → structure and fire separations → MEP rough (all units) → insulation and drywall → finish per unit → CO. We do not front-load four kitchen packages before the foundation inspection.
Contingency 10%–15% of hard cost. Winter and first-time multi-unit GCs should sit toward the high end.
Duplex vs triplex vs fourplex — what actually changes in the bid
All three are residential 2–4 construction. The bid is not a copy-paste.
Duplex. Often one foundation, two kitchens, a fire separation, and two entries. Side-by-side is a different waterproofing problem than stacked. Stacked duplexes hide plumbing in a shared wall that inspectors will open. Budget it.
Triplex. Three wet stacks. Three kitchens. Often a tighter parking story. Urban three-flats need a rear stair or a legal third entry. A “house plus garden unit plus attic” that the city calls a triplex still needs three COs or one CO that names three dwellings. Get the language from the permit desk.
Fourplex. Four kitchens is four appliance packages, four bath roughs, and a fire plan that SFR GCs underprice. Courtyard four-doors look charming and cost more in civil than a simple rectangle. Say which plan you are building.
Do not send a duplex budget with a fourplex set of elevations. We will notice.
Rent comps that are not your uncle’s fourplex
New 2–4 product competes with renovated 2–4, not with brand-new SFRs. If every fourplex on the block is a 1920s stack at $1,250 a door, your new $1,850 door needs a reason — parking, in-unit laundry, separate meters, a legal fourth. Write the reason. If you cannot, use $1,250.
Lease-up on a new fourplex can still take 60–90 days if you deliver in January. Reserve it. A “pre-leased” story needs applications, not texts.
If you plan to sell the building, buyers will underwrite the same rent. A sale pro forma that uses Airbnb on all four doors in a long-term-only city is a pass.
Soil, drainage, and the extra kitchen that sinks the lot
Adding units adds bathrooms and kitchens. That is more sewer load. Some cities charge capacity fees per fixture or per unit. A duplex tap fee is not a fourplex tap fee. Get the written number.
Soil that supports a house may still need correction for a heavier fourplex. A geotech report on infill 2–4 is cheaper than a foundation change order. If the lot is a scrape, read infill lot financing for demo and soil as construction lines.
Floodplain 2–4 is a different insurance binder and sometimes a different foundation. Elevation certificates are not optional color.
Separate addresses, mail, and the appraisal that calls it a house
A new duplex that the post office and the assessor still treat as one house will confuse takeout. Ask for two addresses if the product is two dwellings. A fourplex should have a unit mix the appraiser can photograph as four kitchens, not as a large house with extra sinks.
If the plans show a lock-off that is not a legal unit, do not put rent on it. Construction loans follow the CO, not the marketing brochure.
House-hack photos in the package — “we’ll live in unit 1 for a year” — are a pass. Move-in plans belong at a different lender.
When a 2–4 should have been condos or townhomes
If you intend to sell four deeds, you may be in condo construction or townhome construction, not a single fourplex sale. Selling a fourplex as one building to an operator is the 2–4 construction stack. Selling four interiors to four buyers is another stack, another HOA, another absorption story. Pick one before you ask for money.
Package to submit
- Deed or contract, survey, zoning confirmation of unit count
- Plans with unit mix, meter plan, and parking
- Line-item budget and GC bid
- As-completed 2–4 comps and a rent set if you will hold
- Exit: sale or DSCR path
- If a scrape: demo bid and permit status, or start on infill
Related: new construction loans for investors · ground-up with limited experience · small multifamily construction when you cross five doors.
Ready to build a new duplex, triplex, or fourplex? Use new construction with unit-mix plans. Buying a standing 2–4 instead? Use the hard money rehab path. Get approved · (833) 264-7776
2–4 construction examples are nationwide lending illustrations on investor real estate. Rates, terms, and conditions apply only to qualified borrowers and may change without notice. Jaken Finance Group does not finance owner-occupied housing.