DSCR Loan With No Lease: What Proof of Rent Is Required

If your rental has no written lease, the loan is still doable. The program asks for three months of proof of rental receipt in place of the lease, and — on its own — that substitution carries no LTV penalty. What costs you LTV is not the missing paperwork. It is whether the unit is actually occupied, and whether the tenancy is documented as month-to-month.

That distinction is the whole point of this page. Borrowers with a twelve-year tenant who never re-papered the lease, or a tenancy inherited with the building, routinely assume they are looking at a haircut or a decline. Usually they are not. They are looking at a document request.

Below is the full evidence matrix, item by item, then what each path is testing, where the qualifying rent number comes from, and the two places this genuinely does go wrong.

The rental receipts matrix, in full

This is a refinance question. On a purchase, the program obtains Appraisal Form 1007 and uses 100% of the gross market rent for the DSCR calculation — there is no lease to produce and no receipt requirement to satisfy. The matrix below governs refinance and cash-out files, where the program obtains both a current lease agreement and Form 1007.

Read the seven rows as three groups.

Rows i, ii and iii are the paper-is-fine group. A lease that is current, a lease that expired but contains language converting it to a month-to-month tenancy at the end of the initial term, or an expired lease accompanied by an extension or addendum that states the new rental rate — each of these stands on its own. No receipts are collected.

Rows iv, v and vi are the receipts group. No lease at all; a month-to-month tenancy where the original lease cannot be produced; or an expired lease with neither MTM language nor an extension. All three land in the same place: three months of proof of rental receipt.

Row vii is not a receipts row at all. It is an LTV row that sits inside the same list, and it is the one item in the matrix that changes what you can borrow.

What the matrix is actually testing

The program is not verifying that a lease exists. It is verifying that rent is real, that it is being paid, and that somebody is living there.

A lease is simply the cheapest evidence of all three at once. When it is missing, the file substitutes evidence of payment for evidence of agreement. That is why rows iv, v and vi resolve to the same three months regardless of how the lease went missing — the underwriting question is identical in each case.

It also explains why the substitution is free. Three months of documented rent proves the same fact a lease asserts, and in one respect proves it harder: a lease is a promise, receipts are a record.

Where the qualifying rent number comes from

Producing receipts settles whether rent is being paid. It does not by itself settle the number that goes into the DSCR calculation.

On a refinance, gross rent used in the DSCR calculation comes from the lesser of the lease agreement or Appraisal Form 1007. There is one exception. Where the lease agreement is higher than the gross market rent on the appraisal:

• the amount used for qualifying cannot exceed 10% over the market rent on the appraisal; and
• if the actual rent is greater than market rent but is 10% or less over market rent, the lease amount can be used for qualifying.

The program's own two examples: actual rent of $1,200 against market rent of $1,000 is 20% over, and the allowable qualifying amount is $1,100. Actual rent of $1,050 against market rent of $1,000 is 5% over, and the allowable qualifying amount is the full $1,050.

Note what this means for a long-tenured no-lease file. Below-market rent is the norm in these tenancies — the tenant has been there eleven years and the rent has moved twice. The lesser-of test then bites in the ordinary direction and your receipts are your number. The 10% ceiling only matters where documented collections run above what the appraiser says the unit commands.

Which paths cost LTV and which do not

Three separate things can reduce what you borrow on a no-lease file. Only one of them lives inside the receipts matrix, and people regularly confuse all three.

The receipts themselves are free. The matrix states a documentation requirement for rows iv, v and vi and stops there. It attaches no LTV reduction, no reserve add, and no DSCR adjustment to the act of substituting receipts for a lease.

Row vii is the LTV item. An original lease or a new lease carrying month-to-month terms is limited to 60% LTV. That cap, and exactly what does and does not trip it, is covered in full in [month-to-month lease DSCR loan LTV limit](/blog/month-to-month-lease-dscr-loan-ltv-limit). If your tenancy is month-to-month, read that page before you build a loan amount around it.

Vacancy is a separate test entirely. Unoccupied or unleased long-term rental properties are subject to a 5% LTV reduction to the maximum permitted per the eligibility grid, on refinance transactions only — the reduction does not apply to purchase transactions, and the unit must be in lease-ready condition if vacant. That is the subject of [DSCR loan on a vacant rental property](/blog/dscr-loan-on-a-vacant-rental-property). What matters here is only that vacancy and missing paperwork are different findings. A fully occupied unit with no lease is not vacant.

The family arrangement problem

This is the failure that no amount of receipts fixes, and it is the most common reason a no-lease file dies.

The program requires leases to be fully executed by an Eligible Tenant and the borrower or guarantor as landlord. An eligible tenant is defined as any party other than any borrower or guarantor, any affiliate, any officer, director, executive employee or manager of the borrowing entity, and any family member — including spouse, siblings, ancestors and lineal descendants — of any person or entity described in that list. Stated a second way in the same section: no borrower or guarantor, or owners of the borrower or guarantor where that borrower or guarantor is a legal entity, or their immediate family members may be a lessee.

So the informal family tenancy — your mother in the second unit, a brother in the back house, an adult child paying you rent every month — is not a documentation gap that receipts cure. The tenant is ineligible. Three months of clean deposits from an ineligible tenant do not make the tenancy qualify.

The same section adds that properties cannot be occupied by any of the borrowers or guarantors or their immediate family, and that the financing is only for residential units whose sole purpose is being leased as income property to non-borrower-affiliated tenants, confirmed by the appraiser or lease and a property use affidavit.

Two further lease requirements catch informal arrangements. All tenants on leases must be natural persons — exceptions for other types of entities may be considered on a case-by-case basis. And rent-to-own arrangements and contracts for deed are ineligible outright. Long informal tenancies sometimes drift toward a handshake purchase arrangement; if yours has, that is a different conversation.

What the guideline does not specify about the receipts

Being straight about the boundaries of the written rule is more useful than filling them in.

The Required Rental Receipts section states the quantity — three months — and stops. It does not enumerate an accepted form of proof. It does not say the three months must be the three most recent, or consecutive. It does not say whose bank account they must land in, or what happens if one of the three months is short.

Elsewhere the document treats bank statements and cancelled checks as satisfactory evidence of payment history in unrelated contexts, and for short-term rental refinances it accepts either a 12-month third-party rental history statement or 12 months of borrower bank statements evidencing rental deposits. Those are different requirements for different situations, and we are not going to represent them as the standard for this one.

The practical answer: assemble the cleanest record you have — three recent consecutive months, tied to the subject property and to an account in the borrower or entity's name — and let underwriting confirm the form before you chase an alternative. Ask first.

Edge cases that live next door to this one

A lease signed to fix the problem. If you paper a new lease and the unit is not occupied at the time of the appraisal inspection, the unit is considered vacant and a 5% LTV cut may apply. Re-inspection to verify occupancy is not acceptable, and a lease signed after the appraisal report inspection will not be acceptable — the unit is deemed vacant. Sequencing matters: a lease produced late does not undo an inspection that found the unit empty.

A fully furnished property with no lease. It is treated as vacant and the 5% LTV reduction applies, and the property cannot be listed on any short-term rental website. If a furnished property does have a lease and the current rent exceeds market rent, the program reverts to market rent.

A short lease rather than no lease. A property with a short-term lease of less than 12 months that is not listed on any short-term rental website is limited to 60 LTV — and rental history is not required in that case.

An ADU generating part of the rent. ADU rental income is permitted only if the unit is legal and recognized by the local municipality, there is a separate lease in place with a tenant not affiliated with the tenant in the main unit, there is a separate entrance, and there is a separate meter or utility, all confirmed and validated by the appraiser. A separate lease is named specifically. The receipts substitution is written for the subject property's tenancy — do not assume it extends to counting ADU income without that separate lease.

Term length. Leases with a term of three years or more are not permitted. Long tenancies sometimes come with an old multi-year instrument attached; check the term before you submit it as the fix.

A worked illustration

The figures below are invented for illustration. They are not a quote and not an approval.

A four-unit building, refinance, no cash out. Three units on current leases. The fourth has been occupied by the same tenant since 2014, on a lease nobody can find, at $900 a month paid by check. Form 1007 puts market rent on that unit at $1,150.

The fourth unit is row iv — no lease available — so three months of proof of rental receipt are required. That substitution costs nothing in LTV. Because the documented $900 is below the $1,150 market rent, the lesser-of test uses $900 in the DSCR calculation; the 10%-over-market ceiling never comes into play. All four units are occupied, so the property clears the occupancy count for a four-family property and the 5% vacancy reduction does not apply. Nothing here caps LTV at 60% either, because the tenancy is not being documented as a month-to-month lease.

The file's real constraint is the $900, not the missing paperwork.

One thing the record is inconsistent about

The change log contains an entry dated 5/18/2023 stating that the three-month evidence of receipt of rental income for not having a current lease available was removed. The body of the current guideline — Version 28 — states the requirement plainly at items iv, v and vi.

The current body text is the newer document and is what we underwrite to: three months of proof of rental receipt is required on those paths. We flag the change-log line because you may encounter it, not because it is unresolved. The same log shows the month-to-month LTV limit added on 05/30/25, consistent with item vii as it now reads.

Where FICO sits in this

Nothing in the receipts matrix moves the credit requirement. A minimum FICO of 660 is required for all guarantors on the DSCR program. With a single individual guarantor, the middle score determines rate and LTV. With multiple guarantors, rate and LTV are based on the guarantor with the lowest middle score, and every other guarantor must still meet 660. A borrower cannot have only one credit score or less than 24 months of credit history. 660 is the DSCR number — do not carry a figure over from a commercial program.

What this page does not do

This page explains the evidence the program accepts in place of a written lease on a 1-4 unit investor loan, and which of those paths carry an LTV consequence. It is not an approval, not a quote, and not a rate.

It does not price your loan. Maximum LTV depends on credit score, unit count, loan amount and transaction type under the eligibility matrix; the items here apply as reductions to whatever that grid permits. It does not derive the 60% month-to-month cap or the 5% vacancy reduction — those are covered on the two pages linked above. It does not address reserves, prepayment structure, entity formation, appraisal ordering, insurance, or title. It does not cover short-term rental qualification, which uses a different income method entirely.

And it does not answer legal questions. Whether a verbal tenancy is enforceable where your property sits, what notice a month-to-month tenant is owed, whether a family tenancy raises a tax question, and what your municipality requires of a rental unit are matters for your attorney, your accountant and your local jurisdiction — not for a loan program.

If you have a tenancy with no paperwork and you want to know what it will actually support, send us the three most recent months of what you do have and the property address. We will tell you which row of the matrix you are on before you spend anything.

Guideline DSCR V28 · Reviewed August 31, 2026

Published September 1, 2026 · Updated September 1, 2026