A long-term rental DSCR loan is the standard non-QM investor product for properties leased to tenants under annual leases. It is the simplest DSCR structure because income documentation is straightforward: a signed lease or market rent from a 1007 appraisal form. MLOs who know how to package these deals cleanly get faster approvals and better rates.
Income Documentation
- ✦Signed lease: if the property has a current tenant, provide a signed lease with at least 6 months remaining. Most lenders use 100 percent of the lease amount as qualifying rent.
- ✦1007 market rent appraisal: if the property is vacant or the lease has expired, a 1007 form from a licensed appraiser establishes market rent. Most lenders use 90 to 100 percent of the 1007 market rent figure.
- ✦Confirm which form the specific lender accepts. Some lenders accept a comparable rent schedule from the appraisal report, while others require a standalone 1007 form.
Property Eligibility Common Issues
- ✦Condos: many DSCR lenders impose an LTV cap of 70 to 75 percent on condo investment properties and may exclude non-warrantable projects entirely
- ✦Rural properties: properties in low-population areas may face appraisal challenges or lender concentration limits. Confirm lender geographic appetite before submitting.
- ✦Mixed-use: commercial mixed-use properties are ineligible for most residential DSCR programs. The property must be 100 percent residential.
Presentation Package Basics
- ✦Completed 1003 application with investment property designation
- ✦12 months lease or 1007 form
- ✦Entity docs if holding in an LLC (note: most DSCR programs require a personal guarantee even for LLC borrowers)
- ✦3 months bank statements to document reserves
- ✦Purchase contract if a purchase transaction
✦
Aria can identify which DSCR lenders have the best fit for a specific long-term rental property scenario including LTV, FICO, and DSCR constraints. Ask at vicariointel.com.
7-day free trial. No credit card required.
Ask Aria to Find the Best DSCR Lender for Your Deal →