Prepayment Penalty Rules for DSCR Loans in New York

Prepayment Penalties are Fully Allowed with no restrictions for DSCR Loans in New York. New York law restricts prepayment penalties for consumer-purpose and owner-occupied mortgage loans, but not for business-purpose lending such as DSCR loans. Statutes like General Obligations Law § 5-501 and Banking Law § 6-l apply only to loans made for personal, family, or household use, and explicitly exclude investment-purpose transactions. As such, DSCR Lenders can typically offer all standard prepayment penalty options such as Descending Prepay Penalties (i.e. “5/4/3/2/1” or “2/1”), Flat Prepay (i.e. “5/5/5/5/5” or “3/3/3”) or other tailored structures in the Empire State.

FULL Complete 2026 Guide To DSCR Loan Prepayment Penalties

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