SBC
A commercial cash flow analysis counts only rental income that contributes directly to value or is stable and typical in the marketplace. Cell towers, billboards, trailer and outside-storage rentals, and any extraordinary or non-recurring source are excluded from net operating income. On the operating-business side, gains from asset sales, insurance claims, settlements and investment income come out too. Here is the full list, the principle behind it, and what to do when a large share of your revenue falls in an excluded bucket.
September 1, 2026
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A few NSFs on your business bank statements will not automatically decline a bank statement commercial loan. Overdrawn accounts count as NSF even when overdraft protection covered them, and a returned check that never took the account negative is not an NSF at all. What decides the file is the cause — a customer's bounced deposit reads very differently from your own account management — and how the overdraft was cured. Business savings or a sweep reads differently from a credit line, a credit card or personal funds, and to qualify there cannot be a fee associated with curing the default.
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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On a 2-4 unit property, the whole building is deemed a short-term rental once 50% or more of its units are being used that way. That pulls the entire file into short-term rental treatment: a 60% maximum LTV, a 1.25x minimum DSCR, and six additional months of PITIA reserves. On a duplex, one unit is enough to cross the line; on a fourplex it takes two. This page shows exactly where the line falls on each building size and what it costs to cross it.
September 1, 2026
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Short-term rental income cannot be counted above 125% of the property's market rent, no matter what the property actually grosses. On a purchase there is no history path at all — market rent from the appraiser's 1007 or 1025 is used even when the property has years of booking records. This page covers where the ceiling sits in the calculation, how market rent is established for the comparison, and what it means to buy in a market where nightly rates run far ahead of lease rates.
September 1, 2026
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Our DSCR program does not permit short-term rentals in New York City. The prohibition is written into the Short-Term Rentals section of the guideline and carries no exception language. The property itself is usually still financeable on a long-term lease, at better leverage than the short-term path would have offered anyway. This page covers the rule as written, the 50% unit test that catches two-family owners, and the other New York restrictions an NYC investor should know.
September 1, 2026
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Twelve months of short-term rental operating history is the documentation standard on a DSCR refinance, evidenced either by a third-party rental history statement identifying the subject property or by 12 months of borrower bank statements showing rental deposits. Months with no rent count as zero in the average. A property owned at least 6 months but less than 12 may be considered on a single-loan variance basis, with the income calculation at our discretion. On a purchase, operating history is not used at all.
September 1, 2026
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A DSCR refinance has a specific minimum number of leased units by property type: a duplex needs two of two, a triplex two of three, a fourplex three of four, and a single-family rental its one unit. Below that count the property is classified as unoccupied for the transaction. A separate, lower set of counts applies to refinances and cash-out with a DSCR under 1.00, and occupancy is measured as of the appraisal inspection, not the closing date.
September 1, 2026
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On a purchase, a vacant rental costs you nothing — we qualify on 100% of the market rent from the appraiser's Form 1007 and the vacancy carries no leverage penalty. On a refinance it costs five points: the maximum LTV from the eligibility grid is reduced by 5% when the property does not meet the occupancy definition. That definition is a unit count, not a percentage — a duplex needs both units occupied, a fourplex needs three of four. And the snapshot is taken at the appraisal inspection, so a lease signed afterward does not undo it.
September 1, 2026
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Short-term rental income does not enter the DSCR calculation at face value. Gross monthly rent is multiplied by 80% to account for operating costs, and on a refinance the 12-month collection history is first capped at 125% of market rent. Because 125% times 80% equals 100%, the qualifying income on a short-term rental refinance can never exceed the property market rent, no matter how far above it the property actually grosses.
August 31, 2026
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