1. Property and transaction
Share the address, property type, purchase price or estimated value, loan purpose, requested amount, and intended long-term rental use.
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Long Term Rental Financing
Finance an eligible investment property using supportable long-term rental income and property cash flow. Review purchase or refinance options, documentation, and next steps with theLender.
Investment property only. The borrower or immediate family may not occupy the property. Eligibility and terms vary by transaction, property, borrower, state, and current guidelines.
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Loan overview
Long-term rental loan details
Use this summary to prepare an LTR scenario. Current approved program materials and final underwriting determine the available terms for a specific property and borrower.
| Loan purposes and amounts | Business-purpose financing for eligible investment-property purchases, rate-and-term refinances, and cash-out refinances. Standard LTR DSCR loans generally range from $100,000 to $3.5 million; near-DSCR loans generally range from $100,000 to $3 million. Cash-out proceeds must be used for business purposes. Ownership under six months may require a DSCR of at least 1.15, six additional months of reserves, no credit exceptions, and a new appraisal. Current guidelines and underwriting control. |
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| Occupancy | Investment property only. The borrower or immediate family may not occupy the property. If the borrower occupied it during the six months before application, provide a current lease and three months of documented rent receipts. The intended lease term must exceed 30 days. |
| DSCR qualification | Standard LTR DSCR generally requires a debt service coverage ratio of at least 1.00. Near-DSCR options may consider ratios below 1.00. DSCR equals eligible gross monthly long-term rent divided by monthly principal, interest, taxes, insurance, and association dues. Eligible interest-only loans generally use interest, taxes, insurance, and association dues. Qualification is based primarily on the subject property's cash flow; employment income and IRS Form 4506-C are generally not required. |
| LTR income method | Long-term market rent is documented on Form 1007 or Form 1025. A tenant-occupied purchase should reflect the current monthly rent. A refinance generally requires both the rent schedule and an executed lease, using the lower of actual lease rent or estimated market rent. Higher actual rent may be considered with one month of documented receipt or cleared security-deposit evidence. Estimated market rent above the lease amount may be used up to 120% of the lease amount. Expired leases that converted to month-to-month may remain eligible. |
| Accepted income support | Provide the applicable Form 1007 or Form 1025 rent schedule. Refinance files generally also require the lease. When higher actual rent is used, provide one month of rent receipt or evidence that the security deposit was received and cleared. Leases signed after application require security-deposit documentation. An entity lease may be acceptable when the borrower is not affiliated with the tenant entity. Eligible Section 8 income requires a documented lease and housing-authority contract in an approved state. |
| Property and appraisal | A full interior and exterior appraisal is generally required on Form 1004, 1073, or 1025, together with Form 1007. Loans above $2 million generally require two appraisals, with value based on the lower result. Eligible properties may include single-family residences, planned unit developments, modular homes, condos, condo hotels, non-warrantable condos, two- to four-unit properties, rural properties, and leaseholds, subject to restrictions. Maximum acreage is generally 10 acres. Properties above two acres and vacant refinance properties have lower maximum leverage. C5, C6, and Q6 properties are ineligible. |
| Cash requirements | Down payment or equity, cash to close, reserves, and post-closing liquidity are separate requirements. For standard and near-DSCR loans of $1 million or less, guidelines generally call for zero months of reserves on a purchase or rate-and-term refinance and three months of PITIA on cash-out. Above $1 million, guidelines generally call for three months on a purchase or rate-and-term refinance and six months on cash-out. Cash-out proceeds may satisfy reserves. Gift-fund use can reduce maximum leverage or require at least 5% borrower funds on a purchase. |
| Available terms and pricing | Available structures may include 30- or 40-year fixed terms, eligible fixed interest-only options, and eligible 7/6 or 10/6 adjustable-rate mortgages with interest-only options. Current adjustable-rate guidelines use the 30-Day Average SOFR index, a 4.50 margin, and 2/1/5 caps. Eligible prepayment provisions may extend up to five years, using fixed or declining structures; state restrictions apply. Request a scenario review for current pricing and terms. Published figures are guidelines, not a quote, approval, or commitment. |
Eligibility and terms vary by transaction, property, borrower, state, and current program guidelines. Final underwriting and approved documents control.
How long-term rental DSCR qualification works
Long-term rental debt service coverage ratio (DSCR) financing evaluates an eligible investment property using supportable monthly rent and the proposed housing payment. The rent calculation is one part of underwriting. The property, borrower, transaction, documentation, valuation, title, insurance, state, and current guidelines also determine eligibility and available terms.
Who long-term rental financing is for
Long-term rental DSCR financing is designed for investment properties that the borrower or immediate family will not occupy. Eligible uses may include a purchase, rate-and-term refinance, or cash-out refinance. Property types can include eligible single-family homes, townhomes, condominiums, and two- to four-unit properties. The property, transaction, lease or market-rent evidence, borrower profile, and current program guidelines determine eligibility.
Scenario review
What to prepare for an LTR loan review
A focused scenario review starts with the property, transaction, rent support, requested loan amount, and available documentation.
2. Rent and debt obligation
Provide the lease when applicable, current rent information, the applicable market-rent schedule when available, and the proposed principal, interest, taxes, insurance, and association dues.
3. Eligibility documents
Be ready to discuss ownership, credit, liquidity, reserves, appraisal, property condition, title, insurance, and current program requirements.
Ready for a property-specific review?
Share the basics and discuss current eligibility, documentation, and available structures with theLender. A scenario review is not an approval, commitment, or rate quote.
Review an LTR scenario
Share the property, transaction, and requested loan details for a scenario review. A member of theLender team can discuss current eligibility, documentation, and available structures. This is not an approval, commitment, or rate quote.
Long Term Rentals
Please answer a few questions and submit this form to receive a loan estimate.
Frequently Asked Questions
1. Who is long-term rental DSCR financing for?
It is designed for eligible investment properties that the borrower or immediate family will not occupy. Available purposes may include purchase, rate-and-term refinance, and cash-out refinance. Eligibility varies by property, transaction, borrower, state, and current guidelines.
2. How is LTR DSCR calculated?
LTR DSCR generally equals eligible gross monthly long-term rent divided by monthly principal, interest, taxes, insurance, and association dues. Eligible interest-only structures generally use interest, taxes, insurance, and association dues. Acceptable rent evidence and complete underwriting still apply.
3. What documentation should I prepare?
Be ready to provide the applicable appraisal and rent schedule, an executed lease when required, acceptable rent-receipt evidence when required, ownership or entity documents, property information, liquidity and reserves, insurance, title, and transaction-specific documents.
4. How are refinance cash requirements evaluated?
Refinance transactions are evaluated through property value, payoff, proceeds, costs, applicable leverage, and current guidelines. Required amounts vary by the complete scenario. A purchase-style down payment does not apply to a refinance.
5. What happens after I request a scenario review?
The theLender team reviews the property, purpose, expected rent, requested amount, and available documentation against current options. If a potential path exists, the team can explain the next documents and steps. A scenario review is not an approval, commitment, or rate quote.