Chicago DSCR Loans: the Yield Nobody Quotes

Key takeaways

Chicago's gross rental yield is 7.42%, from a typical value of $357,265 against a typical rent of $2,210 as of 2026-08-31, ahead of every Sun Belt market we compared on the same source and month.
Cook is the only Illinois county that classifies property, and it keeps apartment buildings of seven or more units in the 10% residential class rather than the 25% commercial class.
An owner-occupied building of six units or fewer sits outside most of Chicago's Residential Landlord and Tenant Ordinance under Municipal Code 5-12-020(a), which is why the small owner-occupied multi is a distinct structure here.
Chicago's Fair Notice tiers apply to every residential unit in the city whether or not the RLTO covers it: 30 days under six months of tenancy, 60 days from six months to three years, 120 days after three years.

Program and regulatory figures verified September 15, 2026. Details change; confirm your scenario with us.

By Mike Certo, Cornerstone First Mortgage · NMLS #260555 · Updated September 15, 2026

Chicago is the market investors skip on reputation, and it out-yields the metros they skip it for. That is the case for looking again. The case against is the tax line, and we would rather put both in front of you than sell you one of them.

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The number, and where it comes from

Typical home value $357,265 against typical asking rent $2,210, both Zillow, both as of 2026-08-31, which is a 7.42% gross yield. Measured identically in the same month: Tampa 6.70%, Indianapolis 6.34%, Atlanta 5.89%, Dallas 5.52%, Nashville 4.81%, Phoenix 4.67%. Chicago is ahead of all of them. The full table is here.

The catch, stated plainly

Gross yield excludes taxes, and Cook County tax bills are not small. Worse for a buyer running comparisons, the effective rates published for Illinois are computed on owner-occupied homes carrying the general homestead exemption, and a rental receives none of it. If you underwrite a Chicago deal off a published median tax rate, your ratio will look better on the spreadsheet than it does in the file. The arithmetic is here.

Building size changes the class

On a larger Chicago building the assessment class matters more than most buyers expect. Cook puts residential classes at 10% and commercial at 25%, and Major Class 3 Multi-Family, which includes buildings of seven or more units, sits on the residential side. A building that would be reclassified commercial in another county stays residential here. The class detail is here.

The owner-occupied door

One structural note that shapes what Chicago investors buy. Under Municipal Code 5-12-020(a), dwelling units in owner-occupied premises containing six units or fewer are excluded from most of the RLTO, provided the arrangement was not created to dodge the ordinance. It is the reason the small owner-occupied multi is its own category in this city. The Fair Notice tiers still apply to every unit regardless, so the exclusion is partial rather than total. We raise it because it changes which building a buyer should be looking at, not because we advise on tenancy, which is a lawyer's job and not a lender's.

Here is how the loan works, or see the programs.

Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. Assessment levels, the state equalization factor, county tax rates and city rental ordinances change, and the figures here carry the date we verified them. Confirm current requirements with the county assessor, the county clerk, your CPA, or an Illinois real estate attorney before you buy. Loans are subject to buyer and property qualification.