DSCR lending on residential 1-4 unit investment properties has become mainstream. Commercial DSCR -- loans on properties with 5 or more units, retail, office, or mixed-use -- works on the same cash-flow logic but with materially different underwriting standards, documentation requirements, and lender options. MLOs who work with investors need to understand where the residential DSCR model ends and commercial begins.
Key Differences Between Residential and Commercial DSCR
- ✦Commercial DSCR typically requires a minimum DSCR of 1.20 to 1.25; residential DSCR programs allow as low as 0.75 with pricing adjustments
- ✦Commercial loans are underwritten against net operating income using actual leases and operating statements, not market rent estimates; a vacant commercial property is very difficult to finance
- ✦Loan amounts on commercial DSCR typically start at $500,000 and range up to $10 million or more; most residential DSCR programs cap at $3 to $5 million
- ✦Commercial loan terms are often 5 or 10-year fixed with a 25 to 30-year amortization schedule and a balloon at maturity
- ✦Personal guarantee is commonly required on commercial loans under $5 million; residential DSCR is typically non-recourse
Active Commercial DSCR Lenders in 2026
Lima One Capital, A&D Mortgage, and Patch of Land have commercial bridge and DSCR products for smaller commercial assets. For larger commercial DSCR, regional banks and life company lenders remain the primary source. SBA 504 loans serve as a DSCR-adjacent product for owner-occupied commercial real estate. MLOs without a commercial license often need to refer these to a commercial mortgage broker or banker, depending on state law and their licensing.
Aria at vicariointel.com can walk through commercial DSCR program parameters for specific property types and investor situations, helping you determine whether a deal fits residential or commercial DSCR before you send it to the wrong lender.
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