A 5 to 8 unit building falls into a gap. Residential home programs stop at 4 units. Commercial programs often want bigger buildings and bigger borrowers. Small investors who want a little apartment building get stuck in between. Ijara Community Development offers halal financing built for exactly this size.
It is available nationwide. Down payment is 20%. The credit floor is 660. Financing goes up to $2.5 million, and you do not need prior property-management experience. Start on the Ijara CDC provider page and the home financing hub.
Ready to compare halal options?
Who It Is For
- Investors moving up from a duplex or fourplex
- First-time investors buying a small apartment building
- Families pooling money to buy a building together
- Anyone who wants rental income without interest-based financing
The no-management-history rule is the unusual part. Many lenders want to see that you have run rentals before. Ijara does not require it on this program.
Published Terms
| Item | Ijara CDC Multi-Family 5-8 Unit |
|---|---|
| Where | Nationwide |
| Units | 5 to 8 |
| Maximum | Up to $2.5 million |
| Down payment | 20% |
| Credit floor | 660 |
| Expense ratio assumed | 10% |
| Management history | Not required |
| Structure | Ijara trust. Rent on the property. Title transfers for $1.00 at the end |
What the 10% Expense Ratio Means
Ijara assumes 10% of the building's rent goes to operating costs when it sizes your financing. That is the underwriting assumption, not a promise about real costs.
Real buildings often cost more to run. Repairs, vacancy, insurance, and maybe a property manager all add up. Do your own budget with realistic numbers before you make an offer.
Which Ijara Program Fits Your Building
| Building | Program | Down payment |
|---|---|---|
| 1 to 4 units | Investment Property | 15% to 25% |
| 1 to 8 units, qualify on rent | Investor Cash Flow (DSCR) | 20% |
| 5 to 8 units | Multi-Family 5-8 | 20% |
| Larger apartment complexes | Commercial multifamily | Quoted |
If the building's rent easily covers the payment and your personal income is hard to document, compare this with halal DSCR financing. For buildings with a shop on the ground floor, Ijara also has a mixed-use program.
Run the Building's Numbers
Start with the gross rent from every unit. Subtract vacancy, then real operating costs: taxes, insurance, repairs, utilities you pay, and management. What is left has to cover your payment with room to spare.
- Gross rent from the rent roll
- Minus vacancy, often one unit empty part of the year
- Minus taxes, insurance, repairs, and owner-paid utilities
- Minus management, even if you plan to self-manage
- Equals net income for the payment
Ijara's 10% expense assumption sizes the financing. Your own budget tells you whether you can sleep at night.
How the Contract Works
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The building is held in a single-asset grantor trust. You are the trustee and the beneficiary. You pay rent on the property to the trust instead of interest. When the lease completes, title transfers to you for $1.00.
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Your tenants pay you rent as usual. They do not deal with the trust.
How the Process Usually Runs
- Get the rent roll and expense history from the seller
- Tell Ijara this is a 5 to 8 unit purchase
- Ijara quotes the financing, down payment, and rent schedule
- An appraiser values the building and its income
- You close with a title company. The trust holds title until the lease ends
Ask the seller for actual leases, not just a summary. A rent roll that looks great on paper can hide tenants who have not paid in months.
Frequently Asked Questions
Can I get halal financing for an apartment building?
Yes. Ijara CDC offers halal financing for 5 to 8 unit buildings nationwide, with 20% down and a 660 credit floor, up to $2.5 million.
Is a 5-unit building residential or commercial?
Most lenders treat 5 or more units as commercial. Ijara's 5 to 8 unit program is built for that gap, using residential-style terms.
Do I need landlord experience?
No. Ijara does not require property-management history on this program.
Can I live in one of the units?
Ask Ijara before you apply. This is an investor program, and occupancy rules affect how it is underwritten.
What about a duplex or fourplex?
Those use Ijara's 1 to 4 unit programs. See halal financing for rental and investment property.
Compare providers in your state
See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
If you are ready to move up to a small apartment building, ask Ijara CDC for a 5 to 8 unit quote. Run your own expense budget first. Compare options on the home financing hub.
