Do Any No-Ratio DSCR Lenders Exist

[Adam Zach]

Hey BP community,

We've been scaling a rent-to-own single-family housing model across the Midwest and Southeast and have run into a wall with traditional DSCR lenders.

We've been working with small local banks and credit unions to finance deals, but as we grow, we're looking for more scalable lending partners. We've tried groups like Lima One and Kiavi, but they just don't work for our model — their DSCR underwriting is based on market rents, not actual lease terms, and STR want 12 month's of existing performance.

Here’s an example deal:

• Purchase Price: $400,000

• Lease Terms: 3-year lease at $4,000/month

• Market Rent: ~$2,500/month

Because DSCR lenders are using the lower market rent, we get capped on LTV and lose the leverage we need — even though our tenant-buyer is pre-approved, fully underwritten, and putting down 10%.

We operate two private real estate funds and close 2–4 single-family homes/month for pre-approved rent-to-own tenants. Each home is appraised, inspected, and fully underwritten with long-term lease commitments — and we’re looking for a strategic debt partner (bank, private lender, or broker) who can underwrite based on actual lease terms or use no-ratio underwriting.

Anyone have recommendations for lenders or brokers who specialize in no-ratio or flexible DSCR products?

I’d love to connect and happy to share more deal info if helpful.

Thanks in advance!

[Patrick Roberts]

No-ratio DSCR products are fairly common and will usually lend at ratios down to 0.8 with LTVs around 70% or less. A lot of lenders will also allow the higher of market rent vs lease if the lease is seasoned and performing (usually 3 months seasoning). This varies by product and by lender.

Are you using hard money to acquire these properties? If so, it might be simplest to just ride the hard money loan until the lease is seasoned so that you can use the lease terms rather than the 1007.