Being asked to provide proof of rental payments for DSCR loan

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Being asked to provide proof of rental payments for DSCR loan

John Asher
Member since 2024 · 9 posts · 5 votes

I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y

@John Asher

I have seen that as usually bank statements will show the cashed checks

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  • Brandon Croucier
    Lender · Lake Havasu City, AZ · Member since 2024 · 700 posts · 285 votes
    2y

    Yes, some lenders will require it. If you don't have it, I recommend working with a broker who knows where to place your loan.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @John Asher

    I have seen that as usually bank statements will show the cashed checks

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  • Brandon BeardtPro Member
    Lender · La Crescenta, CA · Member since 2021 · 261 posts · 157 votes
    2y
    Quote from @John Asher:

    I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?


    I would imagine it's to prove you haven't made any late payments for your current residence in the last 12 months. If you own your primary residence and have a mortgage that reports to credit, lenders can easily tell whether or not you have any late payments because it would show on the credit report. Big no-no if this pops up because why would a bank give you loan for an investment property when you're making late payments on your primary residence. Since you're renting, there is no way of knowing if you are current on your rent payments unless you show you've made the last 12 payments on time. Different requirements depending on the DSCR lender being used.

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y

    Its a little much than typical DSCR lenders but there have been reports of an uptick in mortgage fraud (fake leases, occupying a property attested to be an investment property) so this kind of thing is popping up a bit more

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  • John Mason
    Member since 2024 · 1k+ posts · 351 votes
    2y

    Naybe search for lenders who are more relaxed  about it? There are plenty here  on this board

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  • John Asher
    OP
    Member since 2024 · 9 posts · 5 votes
    2y
    Quote from @Robin Simon:

    Its a little much than typical DSCR lenders but there have been reports of an uptick in mortgage fraud (fake leases, occupying a property attested to be an investment property) so this kind of thing is popping up a bit more


    This is for a cash out DSCR loan. I already own the property outright with cash which is why this is throwing me. I could totally see if this was for a new acquisition but for a cash out where I have 100% equity right now this feels odd.

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  • John Mason
    Member since 2024 · 1k+ posts · 351 votes
    2y

    Yes you can reach out here to any of the great DSCR lenders here and I am sure one of them will help you :)

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  • John Asher
    OP
    Member since 2024 · 9 posts · 5 votes
    2y
    Quote from @John Asher:
    Quote from @Robin Simon:

    Its a little much than typical DSCR lenders but there have been reports of an uptick in mortgage fraud (fake leases, occupying a property attested to be an investment property) so this kind of thing is popping up a bit more


    This is for a cash out DSCR loan. I already own the property outright with cash which is why this is throwing me. I could totally see if this was for a new acquisition but for a cash out where I have 100% equity right now this feels odd.


     In addition my drivers license which they have a copy of show that I live in a completely different state. 🤷‍♂️ 

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  • John Mason
    Member since 2024 · 1k+ posts · 351 votes
    2y

    https://www.biggerpockets.com/forums/49/topics/1093867-dscr-...

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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 675 votes
    2y
    Quote from @John Asher:

    I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?


    Yes if you don’t have mortgage history this validates your primary house expense 

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  • Andrew Zamboroski
    Lender · Member since 2021 · 498 posts · 131 votes
    2y
    Quote from @John Asher:

    I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?

    Different programs have different requirements based on their end investor who buys the note. This is most likely to establish your housing expense history/ verification of mortgage (renting in this case). With so many loan programs out there for DSCR now, it’s important to find the right one 😊 
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  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    Lender can have a VOR done (verification of rent) . What is the scenario looking like ? Is this a purchase or refinance ? 

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  • John Asher
    OP
    Member since 2024 · 9 posts · 5 votes
    2y
    Quote from @Jacob Sherman:

    Lender can have a VOR done (verification of rent) . What is the scenario looking like ? Is this a purchase or refinance ? 

    This is a cashout/refinance. They do not want to do a VOR as landlord is an individual. 
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  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y
    Quote from @John Asher:
    Quote from @Jacob Sherman:

    Lender can have a VOR done (verification of rent) . What is the scenario looking like ? Is this a purchase or refinance ? 

    This is a cashout/refinance. They do not want to do a VOR as landlord is an individual. 

     If the landlord is an individual yes many lenders will ask for proof of cancelled checks or form of payment . should be easy to provide checks, zelle, venmo cashapp or however its being paid . Landlord can provide receipts . can get an exception pending the full scenario . lets connect and discuss . 

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  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    2y

    @John Asher  For my last new mortgage, they requested copies of bank statements / cashed checks for all rental properties I own - all don't report to my credit (some are small banks that don't report, others seller finance).  So 12 months for each property, 36 pieces of documentation, to prove payments were being made on time.  I also had to come up with a copy of the original seller finance notes.  

    So yes, that level of documentation is definitely possible.

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @John Asher:

    I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?


     It depends on the lender's requirements. 

    If you have experience holding rentals, a simple LOE may suffice with some lenders. If you are a first time investor and own no primary residence, they may require proof that you will not live in the property. Either through 12 months rental payments, a utility bill, and/or a lease agreement. 

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  • John Asher
    OP
    Member since 2024 · 9 posts · 5 votes
    2y
    Quote from @Erik Estrada:
    Quote from @John Asher:

    I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?


     It depends on the lender's requirements. 

    If you have experience holding rentals, a simple LOE may suffice with some lenders. If you are a first time investor and own no primary residence, they may require proof that you will not live in the property. Either through 12 months rental payments, a utility bill, and/or a lease agreement. 


     I did provide a lease and my drivers license which is a different state from the rental. I was asked for the statement after applying. 

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @John Asher:
    Quote from @Erik Estrada:
    Quote from @John Asher:

    I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?


     It depends on the lender's requirements. 

    If you have experience holding rentals, a simple LOE may suffice with some lenders. If you are a first time investor and own no primary residence, they may require proof that you will not live in the property. Either through 12 months rental payments, a utility bill, and/or a lease agreement. 


     I did provide a lease and my drivers license which is a different state from the rental. I was asked for the statement after applying. 


    It might be that lender's specific requirement then. There is a lot of nuances in DSCR financing. Much like commercial lending.

    [email protected]818-269-7983
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