Key takeaways
- DSCR 1.20+ required by most lenders.
- 75% LTV typical ceiling.
- Rate 75–125 bps over conventional.
- Seasoning 0–90 days.
- Closing in 21–30 days.
Core concepts
DSCR formula
Property NOI ÷ debt service. 1.20+ approved.
LTV options
65/70/75 — higher LTV = higher rate.
Seasoning
Some lenders 0-day; most 3–6 month.
Step-by-step framework
- 1Pre-qual 2 DSCR lenders.
- 2Document lease and rent.
- 3Order appraisal.
- 4Close.
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Common mistakes to avoid
- Not optimizing for DSCR (rent too low).
- Choosing lender with onerous PPP.
- Ignoring escrow setup.
Frequently asked questions
Min loan size?
Typically $100k.
Prepayment penalty?
1–5 year step-down standard.
Self-employed OK?
Yes — that's the point of DSCR.
Foreign national?
Yes — many DSCR lenders accept.
Action checklist
- ☐Two DSCR quotes.
- ☐Lease executed.
- ☐DSCR ≥ 1.20.
- ☐PPP terms reviewed.
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