Home Sweet… Nope
This residential property type, along with townhomes and PUDs, is fully eligible for DSCR loans.
What is a single-family residence / SFR?
All DSCR leases must have an initial term of at least this length.
What is 6 months?
This common business structure often holds rental properties and is acceptable for DSCR loans.
What is an LLC?
RCC pulls this type of credit report combining data from the major bureaus.
What is a tri-merge credit report?
Borrowers must provide asset statements covering at least this many months.
What are 2 months?
A refinance is considered rate/term when the borrower receives no more than this percentage of the New Note amount in proceeds.
What is 2 percent?
If the settlement statement shows he borrower is receiving over 2% the transaction is now considered cash out and would need to be re-underwritten.
Example $200k note over $4000 the deal changes so be mindful
Residential properties become ineligible when they reach this number of units.
What are 5 units?
DSCR leases must NOT be made to these types of tenants.
What are entities or relatives of the borrower?
This trust type allows the borrower to maintain control of the property and is eligible.
What is a Revocable Trust?
Each guarantor must have at least this many trade lines reporting for 12 months.
What are 3 trade lines?
Business bank accounts are eligible only if this is verified.
What is borrower ownership and access?
An appraisal becomes unusable for DSCR loans once it exceeds this number of days from origination.
What is 120 days?
Other Documents -Background Check, Credit Report, Flood Certificate, OFAC and Title 90 days
VOM or Equivalent 60 day
A single-family property becomes ineligible when its living area is smaller than this square footage.
What is 600 square feet?
A month-to-month lease is acceptable only if supported by the original 12-month lease and this many months of rent verification.
What are 2 months?
This pass-through structure used by small businesses can be an eligible DSCR borrower.
What is an S-Corporation?
When three credit bureaus return, RCC uses this score to qualify the borrower.
What is the middle score?
Retirement accounts are eligible for reserves but are counted at only this percentage of their value.
What is 60 percent?
If RCC’s review of value differs from the appraised value by more than this percentage, the loan is qualified using the lesser of the appraised value or the underwritten value.
What is 5 percent?
≤ 5% variance from appraised value: appraised value may be used to qualify the loan.
> 5% variance from appraised value: underwritten value will be used to qualify the loan
Properties exceeding this lot size are not eligible for DSCR financing.
What is more than 10 acres?
These types of statements are NOT acceptable for rent verification.
What are borrower-generated statements? (So no hand written receipts!)
This structure removes control from the borrower and is not eligible for DSCR loans.
What is an Irrevocable Trust?
This type of criminal conviction makes a borrower ineligible no matter how old it is.
What is a felony conviction?
Funds from this type of business account cannot be used as borrower liquidity.
What is a business line of credit?
Minimum ownership seasoning required for most refinances not classified as delayed purchases.
What is 3 months?
Now delayed Purchase Financing property acquired within the most recent 180 days, where the property is owned free & clear. • The original price obtained without existing debt, (original purchase SS) then Lesser of purchase price + acceptable cost basis (documented improvements + closing costs) or AIV is used when calculating LTV. Rate/Term Refinance
Properties with appraisal condition ratings of these levels are considered not lease-ready and therefore ineligible.
What are C5 or C6?
Section 8 leases require a valid HAP agreement and this amount of rent verification.
What are 3 months?
Housing Assistance Payments
It’s the official contract between:
The property owner (landlord)
The Public Housing Authority (PHA)
This land ownership model, often used for affordable housing preservation, is not DSCR eligible.
What is a Community Land Trust?
This is the maximum mortgage late history allowed in the past 12 months.
What is 0x30x12?
Newly opened accounts must show this from the original source of funds.
What is 60 days of seasoning?
A loan with DSCR of 1.20x and a $1.3MM loan amount falls into this reserve tier.
What is the 3-month PITIA reserve tier?
Reserve Requirements (3) months (P)ITIA reserves are required where either: • DSCR ≥ 1.15x • Loan Amounts < $1.5MM (6) months (P)ITIA reserves are required where either: • DSCR < 1.15x • Loan Amounts ≥ $1.5MM