DSCR
Medical collections do not stop a DSCR loan, and they do not have to be paid off. Our DSCR guideline allows medical collections to remain outstanding if the balance is less than $10,000 in aggregate. Judgments, tax liens, charge-offs and past-due accounts are treated very differently and generally must be satisfied or brought current before or at closing. This page gives the exact thresholds, what documentation clears each item, and where the guideline is silent.
September 1, 2026
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A completed foreclosure, a deed-in-lieu or a short sale carries a three-year waiting period on our DSCR program. All three are treated identically, and the clock runs from the date the event finished, not the date you stopped paying. A recorded notice of default or pre-foreclosure sale carries its own 36-month look-back even if nothing was ever lost, and a written explanation is required for a full year after the waiting period has run out.
September 1, 2026
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A lease with a term of three years or longer makes a 1-4 unit investor property ineligible under our DSCR program. It is a flat no, not a pricing hit or an LTV reduction, and the guideline states it in one line without giving a reason. This page covers the rule, the lease provisions it sits next to, why commercial property treats long leases as an asset instead, and what to do if you have already signed one.
September 1, 2026
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A 1-4 unit property occupied under a rent-to-own, lease-purchase or lease-option arrangement is not eligible for our DSCR program. The guideline says so twice: rent to own and contract for deed are ineligible as leases, and leasing with purchase option properties are an ineligible property type. The option is a collateral problem, not a paperwork problem, so a cleaner second lease does not fix it. This page covers where the rule comes from, how it interacts with the eligible-tenant and occupancy rules, and the three realistic paths open to a landlord who already has a rent-to-own tenant.
September 1, 2026
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A student rental qualifies on our DSCR program only if four conditions are met at once: every lease is annual, every lease carries a parent guarantee, all leases share the same start and end date, and the property sits less than 5 miles from a local college or university. Meet all four and the property is permitted with a 5% reduction in the maximum LTV from the eligibility grid. Miss the annual term and you land in the short-term lease bucket at 60% LTV instead. This page covers by-the-room versus whole-house leasing, the summer appraisal trap, and what the guideline does not say.
September 1, 2026
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An expired lease still works as rent evidence on a DSCR refinance if it contains language converting the tenancy to month-to-month at expiry. With that clause, no rental receipts are required. Without it, and without a signed extension, the program asks for three months of proof of rental receipt instead. Here is how to tell which path your file is on before the appraisal is ordered.
September 1, 2026
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Not while you are still holding it. Under the DSCR program guidelines, virtual currency is not permitted unless it is converted to U.S. currency and deposited into an eligible asset account, with documentation showing the funds came from a digital currency account you own. There is no haircut schedule for crypto, because crypto in its native form has no admissible value on the file. The hard part is what happens next: a six-figure deposit from an exchange lands squarely inside the large-deposit sourcing rules.
September 1, 2026
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Funds held in a business account can be used for the down payment, closing costs and reserves on a 1-4 unit investment property loan. If the account is not in the borrowing entity name, two conditions attach: a natural borrower or guarantor must own 25% or greater of the company holding the account, and must either be named on the account or provide proof of access to 100% of the funds from other members. This page walks both conditions, the documentation that satisfies them, and what happens when you share the business with partners.
September 1, 2026
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There is no dollar threshold that makes a deposit "large" on a 1-4 unit investor file. The test is whether the deposit is inconsistent with your own monthly deposit activity in the account funding your down payment, closing costs, or reserves. Unverified funds are not acceptable, and several sources are ineligible no matter how well you document them. This page covers what triggers the request, what documentation closes it, and how to prepare an account so it never arrives.
September 1, 2026
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Retirement accounts do count toward reserves on a DSCR investment-property loan, but at a 30% haircut, so 70% of the balance is credited. A plan that does not allow any type of withdrawal is ineligible for reserves entirely, no matter the balance. This page reproduces the full asset-type haircut table, explains the evidence required for employer-sponsored plans, and lists the assets excluded outright.
September 1, 2026
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You can use gift funds on a DSCR investment-property loan, but three limits apply at once: a 50% cap measured against the total required down payment and closing costs, a defined list of close relatives as acceptable donors, and a flat prohibition on using gift money to meet reserves. This page covers all three, the gift letter contents and transfer trail we require, and how to time the deposit so it is never questioned.
September 1, 2026
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A family member is not an eligible tenant under our DSCR lease requirements, so a lease with a relative is not the lease that qualifies the loan. Below-market family rent is not marked up to market on a refinance, and on a purchase the appraiser's market rent is what we use anyway. This page explains who counts as an eligible tenant, how the family exclusion reaches entity owners and managers, and what the file looks like when there is no conforming lease.
September 1, 2026
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A rental with no written lease is still financeable. On a refinance the program accepts three months of proof of rental receipt in place of the lease, and that substitution carries no LTV reduction of its own. What does cost LTV is a month-to-month lease or an actually vacant unit. This page reproduces the full seven-item rental receipts matrix and separates the paperwork question from the LTV question.
September 1, 2026
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Rent from an accessory dwelling unit can count toward DSCR on our 1-4 unit investor program, but only when four conditions are all present: the unit is legal and recognized by the municipality, a separate lease is in place with a tenant unaffiliated with the main unit, there is a separate entrance, and there is a separate meter or utility. The ADU also has to clear a separate set of property requirements first, including the one-ADU-per-parcel limit and the separate-features test. If any condition fails, the ADU rent is not reduced. It drops out of the DSCR calculation entirely.
September 1, 2026
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A lease written on month-to-month terms limits a DSCR loan to 60% LTV — a hard ceiling, not a reduction off your grid maximum. An expired term lease that rolls to month-to-month by its own language is treated differently and often needs no rental receipts at all. Where there is no lease, three months of proof of rent is required. Signing a term lease of twelve months or more before the appraisal inspection is usually a one-afternoon fix worth tens of thousands in proceeds.
September 1, 2026
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Gross rent for a DSCR loan comes from the lesser of your lease or the appraiser's Form 1007 market rent, with one exception. When the lease is higher than market, the rent used to qualify is capped at 10% over the appraisal, so a lease 20% above market qualifies at 110% of market and no more. Below that line the lease is used whole. On a purchase the lease is not an input at all: 100% of the 1007 market rent is used.
September 1, 2026
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On our DSCR program, a fully furnished rental with no lease in place is treated as vacant and takes a 5% LTV reduction, even though the property is equipped and earning. Separately, when a furnished property does have a lease and the rent exceeds market, the qualifying rent reverts to market rent, so the furniture premium never reaches the DSCR calculation. This page explains both consequences, what a signed lease changes, and how to sequence an application.
September 1, 2026
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A lease shorter than twelve months on a property that is not listed on Airbnb, Vrbo or any other short-term rental platform is capped at 60% LTV, but no rental history is required. It is a distinct third category between an annual lease and a short-term rental, and it avoids the 80% income haircut, the 1.25x DSCR floor and the extra six months of reserves that apply to true short-term rentals. Travel-nurse housing, corporate rentals and furnished mid-term lets usually land here.
September 1, 2026
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A short-term rental file on our DSCR program carries nine months of reserves: the three-month base that applies at a DSCR of 1.00 or higher, plus a six-month add-on that attaches specifically to short-term rentals. Reserves are measured in months of PITIA on the subject property, verified before funding, and sit on top of your down payment and closing costs. This page walks the base tiers, the STR add-on, what changes on interest-only, and which assets count and at what haircut.
September 1, 2026
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No. Short-term rental income is not available to an inexperienced investor on our DSCR program, so the qualifying income has to be long-term market rent. The experience test turns on ownership history: owning and managing investment real estate for at least 12 consecutive months in the most recent three years, or three or more properties each held twelve months over the past 24. This page gives the definition exactly, the other overlays an inexperienced investor carries, and the path forward.
September 1, 2026
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