DSCR loan questions — answered in plain language.

DSCR = Gross Monthly Rent ÷ Total Monthly PITIA (1.00 = rent exactly covers the payment; higher is stronger). Worked example: rent = $2,500/month. PITIA = $1,420 P&I + $330 taxes + $110 insurance + $60 HOA = $1,920. DSCR = $2,500 ÷ $1,920 = 1.30x — the property generates 30% more income than it costs to carry. A result below 1.0 means the rent doesn't cover the payment. Lenders use the lower of the signed lease or the Form 1007 appraiser market-rent estimate — not the Zillow figure or the listing.

PITIA is the full monthly payment — Principal, Interest, Taxes, Insurance, and HOA dues. P = Principal. I = Interest at the note rate. T = Property taxes (actual annual bill ÷ 12 — use the post-sale assessed value, not the seller's homestead-exempt bill). I = Insurance (hazard + flood if required — get a real quote; coastal properties can run $300–600/month). A = HOA dues (full monthly amount). Taxes and insurance are the two PITIA components that most often surprise borrowers at underwriting.

DSCR loans are non-QM (non-Qualified Mortgage) — they fall outside the federal safe-harbor rules under 12 CFR 1026.43(e)(2). That's exactly what enables them: no income verification, no required signed lease, projected rent is allowed. The trade-off is that lenders bear more risk, which is why DSCR rates run roughly 50–125 basis points above conforming loan rates.

Rates change with market conditions. These historical ranges are from Jun 25, 2026, not live pricing: a strong file (740+ FICO, LTV (how the loan amount compares to the property value) at or below 75%, DSCR at or above 1.0, prepayment penalty accepted) ran approximately 6.50–7.00% on a 30-year fixed — roughly 50–125bps above conforming. Most files landed 6.85–7.50%. Weaker files (sub-1.0 DSCR, short-term rental, FICO below 680) ran 7.50–9.50%. ARM (adjustable-rate mortgage — the rate is fixed for a few years, then resets periodically) options started lower; check the reset cap structure carefully. Verify current pricing before making any decisions.

DSCR files usually move faster than conventional ones, because there is no income verification — just the appraisal (which includes the Form 1007 rent estimate), property documents, and a credit pull. Greenstreet is a brokerage, not the lender, so while we move your file along we cannot set or promise the lender's closing date. Ask us — or the lender on your file — for their current turn times in writing.

Sometimes. Most lenders require a DSCR (whether the property's rent can cover the loan payment — 1.00 = rent exactly covers it; higher is stronger) at or above 1.00. Some accept as low as 0.75 with compensating factors such as a strong credit score and more cash reserves. Sub-1.0 options exist, but lender choices narrow sharply and reserves jump to 9–12 months. If the DSCR is below 0.75, most institutional programs don't apply.

The published Greenstreet program matrix includes minimum FICO scores from 620 to 660, but that headline number does not establish eligibility. The applicable floor also depends on loan amount, leverage, transaction type, property type, DSCR, borrower status, and the current program grid. Higher credit and lower leverage generally improve the available structure; verify the exact current matrix before relying on a threshold or pricing assumption.

Published purchase maximums reach 80–85% LTV in some Greenstreet program scenarios, but the applicable grid cell depends on credit, loan amount, DSCR, transaction type, property type, and borrower profile. More equity can improve payment coverage and may expand available structures. Treat any down-payment figure as a scenario input until the current program matrix is reviewed for the specific deal.

Lenders require reserves (months of mortgage payments kept in the bank after closing). Greenstreet's general reserve estimate starts from a DSCR-tiered base: at DSCR 1.25 or above, 3–6 months; at 1.00–1.24, 6–9 months; at 0.75–0.99, 9–12 months; below 0.75, 12 months. On top of that, overlays can add extra months for: short-term rental strategy (+3), credit score below 680 (+3, or +6 below 640), first-time investors (+3), loans above $1M (+3), foreign nationals (+6), LTV above 80% (+1), and California properties (+6, applied to every DSCR tier). Everything is capped at 12 months total. This is a general estimate — the specific program you qualify for may set its own reserve minimum (see that program's page), which governs your actual file. Retirement accounts count at 70% if you are 59½ or older. Cryptocurrency counts as zero.

Yes — and most lenders prefer it for business-purpose compliance. LLC vesting is standard. You will sign a personal guaranty (full recourse). The entity can have at most 4 owners; the guarantor must own at least 51%. Layered LLCs (an LLC inside another LLC) are capped at 2 layers. Caution: New Jersey LLC vesting is high-risk — some lenders won't take NJ LLC deals due to prepayment-penalty ambiguity under N.J.S.A. 46:10B-2.

Potentially. Several published Greenstreet programs identify foreign-national paths, and one identifies ITIN tiers, but documentation, credit alternatives, leverage, reserves, entity requirements, and sanctions review vary by program and transaction. Confirm the current program matrix and required evidence before treating a scenario as eligible. FIRPTA may affect a later sale, so coordinate transaction-specific tax questions with a qualified cross-border tax professional.

Six steps. The day ranges below are typical industry sequencing, not a Greenstreet commitment — the lender on your file sets the actual schedule. (1) Soft file review (Day 1–2): the provider checks program fit — property type, DSCR range, FICO tier, entity structure, reserves. (2) Term sheet (Day 2–4): indicative rate range, fees, reserve requirement, prepay options — not a commitment. (3) Formal application + appraisal ordered (Day 3–5): you complete the application and pay the appraisal deposit; the 1007 rent schedule is part of the appraisal. (4) Document submission (Day 5–10): submit the full doc package in parallel with the appraisal. (5) Underwriting (Day 12–20 after appraisal returns): DSCR verified at the locked rate, title reviewed, conditions issued. (6) Clear to close → closing → funding: 3-business-day CD delivery period required by federal law. Total target: 21–30 business days on a clean file. The appraisal is the critical path — order it as early as possible.

Four levers: (1) Buy down the rate: each 0.25% rate reduction saves ~$15–17/month per $100K of loan. On a $400K loan, buying down 0.50% saves ~$130/month in P&I. Points cost roughly 1% of loan per 0.25% of rate reduction. (2) Switch to interest-only (IO): IO eliminates the principal component, saving roughly $250–350/month on a $400K loan at current rates. Requires 720+ FICO, ≤75% LTV on most programs. (3) Raise the qualifying rent: provide the appraiser with comparable rental data before the inspection; sign a market-rate lease before closing (if vacant); or use documented 12-month STR history if the property is STR-eligible. (4) Increase the down payment: going from 80% to 75% LTV on a $400K property drops the loan by $20K, cutting principal and interest by roughly $130 to $140 per month at the rates quoted above AND unlocks the better LTV rate tier, saving an additional 0.25–0.50%. Levers 2 and 4 combined can often take a 0.92x DSCR to 1.10x+ without touching the rent.

The deal-break rate is the interest rate at which DSCR falls to exactly 1.00x — the lender's hard floor. Below 1.00x, the deal won't qualify. The headroom between your offered rate and the deal-break rate (in basis points) tells you how much rate shock the deal can absorb before it fails — useful for ARM reset modeling and refinance planning. Greenstreet's Deal Analyzer surfaces both numbers on every solve.

No. A significant share of DSCR loans close without a signed lease. Lenders use Form 1007 market rent from the appraisal — the appraiser's estimate of what the property would rent for — as the qualifying figure. If you do have a lease, the lender uses the lower of the lease rent and the 1007 rent. Vacant properties and new acquisitions are fine.

Yes, but short-term rental income is qualified more conservatively. Lenders use the lowest of: (1) Form 1007 long-term rental appraisal, (2) AirDNA projected income after a haircut, or (3) documented 12-month platform payout history after a smaller haircut. Documented history is discounted less than a projection because it is evidence rather than a forecast: this site's model uses 80% of a projection and 90% of documented history. Each provider sets its own figures. If you don't have 12 months of STR history, the 1007 long-term rent controls — which can be significantly lower than your Airbnb projection. Short-term rental properties also require 3 extra months of reserves (mortgage payments kept in the bank after closing). STR legality is a city and county question, and Greenstreet holds no municipal STR dataset — confirm the local rule before you rely on the income.

Eligible: single-family homes (attached and detached), 2–4 unit residential, warrantable and non-warrantable condos, condotels (with conditions), manufactured/modular homes, ADUs. Not eligible: assisted living or group homes, agricultural properties over 20 acres, co-ops, fractional ownership or timeshares, mixed-use commercial, properties under 500 sq ft. Properties must be in C4 condition or better (no significant deferred maintenance).

No W-2s or tax returns — but there is a document list. Property docs: executed purchase contract or mortgage statement, Form 1007 rent schedule (from the appraisal — not something you provide), signed lease if occupied, HOA dues statement. Insurance: hazard binder showing investment occupancy type, flood binder if the property is in a FEMA Special Flood Hazard Area, wind/hurricane coverage where required. Entity docs (if buying through an LLC): Operating Agreement, Articles of Organization, Certificate of Good Standing dated within 90 days, EIN letter, resolution to borrow. Borrower docs: photo ID, SSN or ITIN, credit authorization, 12 months bank statements for reserves. Funds to close: 60-day paper trail on down payment and closing cost funds. The three items that most commonly delay closings: insurance binder with the wrong occupancy type, LLC with lapsed good standing, and a reserves shortfall discovered late in the process.

Lenders use the lowest of three figures: (1) Form 1007 long-term market rent — the appraiser's estimate for the property rented unfurnished on a standard lease. This is the floor and controls if you have no STR history. (2) AirDNA projected income after a haircut — the market estimate, reduced for vacancy and seasonality; this site's model uses 80%. (3) Documented 12-month STR gross revenue after a smaller haircut (this site's model uses 90%, because history is evidence rather than a forecast) — only available with full platform payout statements for all 12 months. If the property has never operated as a short-term rental, you qualify on the 1007 long-term rent regardless of what Airbnb projects. Short-term rental adds 3 extra months to the reserves requirement.

Usually yes, if you plan to hold the property for 3 or more years. A prepayment penalty (a fee some loans charge if you pay the loan off or refinance early — typically a declining schedule: 3/2/1% over three years or 5/4/3/2/1% over five) saves 0.50–0.80% in rate vs the no-penalty option. That monthly savings compounds over a multi-year hold and often more than offsets the penalty itself. The math favors accepting the penalty unless you expect to sell or refinance soon. Caution: some states restrict or ban prepayment penalties on investment property loans. Check the State Rules page before assuming the penalty option is available.

Yes. Both a rate & term refinance (replace your current loan to change the rate or term, without taking cash out) and a cash-out refinance (replace your loan with a larger one and take the difference in cash) are available on DSCR investment properties. Both require the property to re-qualify on DSCR at the new rate and new loan amount.

For a rate & term refinance: typically 6 months from your original closing date (some lenders allow 3 months). For a cash-out refinance: typically 12 months of ownership — this is the standard institutional floor for investment property cash-out. Exception: if you purchased with all cash (delayed financing), some lenders allow cash-out within 6 months, with the cash-out capped at your original acquisition costs.

Most DSCR programs cap cash-out refinances at 75% LTV (how the loan amount compares to the property value — lower means more equity). Some programs go to 70% on larger loans, short-term rental properties, or lower credit scores. Rate & term refinances are generally allowed up to 80% LTV. The DSCR must qualify at the new, higher loan balance — if rates have risen since purchase, the higher payment may push DSCR below the qualifying floor.

Break-even months = Total closing costs ÷ Monthly payment reduction. Example: $8,000 in closing costs on a $300/month payment reduction = 26.7 months to break even. If you sell or refinance again before month 27, the refinance cost you money. Important: if you have a prepayment penalty (a fee some loans charge if you pay off or refinance early) on the existing loan, add the full penalty amount to the closing costs. A 3% penalty on a $400K loan is $12,000 — that adds 40 months to break-even, pushing it past 5.5 years. Run this before you pay the appraisal deposit.

Three regulatory shifts: (1) §1071 small-business data collection threshold raised to 1,000 originations/year, effective May 1, 2026. (2) HOEPA thresholds refreshed for 2026. (3) MN HF 3437, effective Aug 1, 2026, makes business-purpose DSCR loans legal in Minnesota with full prepayment penalties allowed. None of these change the DSCR math — they change the paperwork.

OBBBA makes 100% bonus depreciation permanent (investors can shelter Year-1 taxable income via cost segregation) and raises §179 to $2.56M for 2026. The QBI deduction was made permanent at 20% — an earlier House draft would have raised it to 23%, but that change did not survive into the signed law, so model 20%. For a $400K deal, expect roughly $12K–$20K of Year-1 depreciation shield depending on land/building split — actual outcome depends on your tax situation. Consult a CPA; Greenstreet's Tax Engine models this with OBBBA defaults.