DSCR Loan for New Construction 2026: Can You Finance Before There Is Rent

New construction investment properties are one of the more complex DSCR scenarios because the core underwriting metric, debt service coverage, requires rental income that does not yet exist on a property that has never been leased. Most DSCR programs address this by relying on appraiser-derived market rent rather than actual rent history.

How Lenders Handle New Construction DSCR

The standard solution for a new construction or recently completed investment property with no rental history is a 1007 appraisal form, which is a single-family comparable rent schedule completed by the appraiser. The appraiser identifies comparable rental properties in the market and derives an estimated market rent for the subject property. Most DSCR lenders accept 90 to 100 percent of the 1007 market rent figure as qualifying income for the DSCR calculation.

Construction Financing to DSCR Permanent

• ✦Some investors use a construction or bridge loan to finance the build phase and then refinance into a DSCR permanent loan once the certificate of occupancy is issued
• ✦Seasoning requirements vary: some DSCR lenders require 3 to 6 months of ownership after CO before a cash-out DSCR refi is available
• ✦One-time close construction-to-permanent DSCR programs exist at a small number of specialty lenders, converting from construction to permanent at CO without a second closing

Common Issues on New Construction DSCR Files

• ✦Appraisal availability: appraisers who complete 1007 forms for new construction must have comparable rental data in the market. In thin markets with limited rental comparables, the 1007 may take longer or produce a lower rent estimate.
• ✦Certificate of occupancy: the property must have a CO before most permanent DSCR lenders will fund
• ✦Builder warranty period: some lenders require the property to be past the builder warranty claim period before accepting it for DSCR financing