DSCR loan documents: what you hand over instead of tax returns

A DSCR loan asks one question first: does the property's rent cover its payment? Because the property does the qualifying, the documents that prove what you earn are not on the list. No tax returns, no W2s, no pay stubs, no employment history, no debt-to-income calculation.

That does not mean there is no list. It means the list is about the property and the entity, not about you. Here is what it actually contains.

The property's income

A lease, if the property is rented. On a refinance, the in-place lease is the starting point. Bring the signed lease and, if you have it, a few months of rent deposits so the rent on paper matches the rent in the bank.

A market rent, if it is not. On a purchase, or a property that is vacant or newly renovated, the appraiser supplies a market rent alongside the value. That number, not the rent you hope to get, is what goes into the ratio. If you want to know where a property lands before you pay for an appraisal, run it through the DSCR calculator using a conservative rent.

The property itself

The purchase contract, if you are buying. If you already own it, the deed or a recent mortgage statement shows it.

Insurance. A quote or binder for a landlord policy, since the premium is part of the payment the rent has to cover.

A payoff statement, if you are refinancing out of an existing loan. This is the item most often requested late. Ask your current lender for it the day you apply.

The entity

DSCR loans close to an entity rather than to you personally, because this is investment property lending, not owner-occupied. Expect to provide:

• Articles of organisation and the operating agreement for the LLC
• The EIN letter
• A certificate of good standing from the state

An entity that has lapsed for an unpaid annual report is the quiet delay on these files. Check its status online before you apply. It takes two minutes and saves a week.

You, briefly

Credit is pulled and it affects pricing. Reserves are checked, usually with recent bank statements showing money left over after closing. That is the whole of the personal side. Nobody asks you to explain a deposit from four years ago.

What slows a DSCR file down

Almost never the documents above. The two items that set the closing date are:

1. The appraisal. It sets both the value and the market rent. A low rent figure changes the ratio, and a changed ratio changes the loan amount. See DSCR loan requirements for how the ratio drives the numbers.
2. Title. The same issues that delay any closing: an old mortgage never released, a judgment, a payoff nobody chased. Open title early.

With those moving, a DSCR loan here closes in 14 to 21 days, from $75,000 to $1,000,000 and up, for a purchase or a refinance. The full program is on the DSCR loans page.

The short version

If the property covers its payment, the rest of this list is paperwork.