Your figure
The rent on your lease.
- Monthly rent
- $3,200
- Monthly payment, taxes, insurance
- $2,783
Ratio1.15
Clears the usual 1.00 floor.
Finance/DSCR loans
DSCR loans in California. We run the ratio before you pay for the appraisal.
A DSCR loan is judged on the property, not on you: the rent has to cover the payment. We tell you how far the appraiser’s rent can fall before it fails.
What we look at
Six kinds of property, all held for income.
If you live in it, it is not on this list. Every one is business purpose, in California.
- Single-family rentalOne house, let to a tenant. The commonest file and the fastest to price.
- Two to four unitsEach unit’s rent counts, so one vacancy does not end the file.
- Five to ten unitsSmall multifamily. Still one appraisal, not a commercial package.
- CondominiumsIncluding non-warrantable ones. A failed agency rule is normal here.
- Short-term rentalsLet by the night. Bring 12 months of platform statements.
- Held in an LLCTitle in an entity is normal. Portfolios across entities are fine.
The number that declines you
You do not write the rent. The appraiser does.
Same property, same payment. The appraiser’s rent schedule comes in $500 under your lease, and the file falls under the floor. Your rent could fall 13 percent before it failed.
The appraiser's figure
The rent schedule, Form 1007.
- Monthly rent
- $2,700
- Monthly payment, taxes, insurance
- $2,783
Ratio0.97
Same property, under the floor. Underwriting uses the lower of the two rents.
Run it yourself
Every figure below already exists.
The lease or the market rent, the loan payment, the taxes, the insurance, the dues. Nothing here waits on a third party.
Debt service coverage ratio
-Fill in the five lines. Your own numbers in, your number out. An example, not an offer.The boundary
Half of this job is telling people we are the wrong call.
You get that answer in a day.
- A rental you hold for incomeLet, or ready to let. Business purpose.
- One to ten unitsCalifornia, $75,000 to $6,250,000.
- Title in an LLCOr in your own name.
- A non-warrantable condoA product here, not a decline.
- A file another lender declinedBring the reason. Often it is fixable.
- Not for usA home you live in, a second home, construction already started, anything needing a bank, property outside California.
What we read
Four documents, read before anyone spends anything.
- The lease, or the market rentYour signed lease; for a vacant property the appraiser’s rent schedule. Underwriting takes the lower.
- The tax billThe county figure, not the seller’s estimate. A reassessment after sale moves the ratio.
- The insurance quoteA real quote. In parts of California this line has doubled.
- HOA dues and assessmentsDues sit in the ratio. A special assessment does not, until it does.
Questions
The eight we are asked most.
What DSCR do lenders look for?
Most lenders set the floor at 1.00, meaning the rent covers the payment exactly. Some go to 0.75 with a larger deposit and different pricing. A ratio of 1.25 or better opens the widest set of options.
Is my personal income really never checked?
Correct. There is no debt-to-income calculation, no W-2 and no tax return in a DSCR file. Your credit score and your reserves still matter, and the property still has to carry itself.
Can I borrow in an LLC?
Yes, and it is the normal structure. DSCR lending is business-purpose lending, so an LLC, corporation or trust holding an investment property is the expected borrower.
What if the property is vacant?
Market rent from the appraiser’s Form 1007 is used instead of a lease. On a condo there is a prior question: whether the project is financeable at all.
What happens if the rent schedule comes in low?
The rent falls while taxes, insurance and dues stay where they are, so the ratio drops. It is the most common reason a file that looked fine is declined. We tell you how much room you have first.
Do you charge to look at the file?
No. Reading the documents and running the ratio happens before anything is ordered and before anything is owed.
Can you help if another lender already declined me?
Often, yes. The first useful step is finding out exactly which number or which rule stopped the file.
Is a short-term rental treated differently for DSCR?
Yes. Short-term income is assessed differently from a twelve-month lease, the set of lenders is narrower, and some treat heavy short-term use as a different property class.
General information, not legal or tax advice.
Send one property.
You get the ratio, the gap and the answer. No application, no credit pull, no fee.
Wexmoor Circle LLC · NMLS #2841970 · Equal Housing Opportunity. Business-purpose loans on investment property in California. Information only, not a commitment to lend.
