Can you get a DSCR loan on a property before its rented?

Investor · Atlanta GA · Member since 2019 · 35 posts · 20 votes

Hi,

Can I get a DSCR loan on an investment property at the time that I'm buying it even before its rented?

Lets say its an easy rehab and its vacant, the ARV won't be that much higher than the price I will pay at closing, will a lender give a 75% DSCR loan? (or maybe its a different type of loan?) With no seasoning? Will they take an average rent in the area to calculate DTI?

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Ravi Punn

Lender · NY · Member since 2025 · 11 posts · 15 votes

Quote from @Yael Maroko:

That's what I want to avoid.. I want to have the loan at the closing. The down payment will be y own cash

Absolutely — great question, and one I get all the time.

Yes, you can get a DSCR loan on a vacant property. If the rehab is light and the property is close to rent-ready, many lenders will use market rent comps (via Form 1007 or STR1007) to underwrite — no lease required, and no seasoning needed.

If it still needs work, you may need a short-term bridge loan first and then refi into a DSCR once stabilized. But if it's clean and rentable, 75% LTV is definitely doable with the right FICO and DSCR.

We recently closed one just like this — vacant duplex, no tenants, closed in under 2 weeks using projected rents.

Happy to take a look at your deal structure if you want a second opinion — just shoot me a message.

— Ravi Punn

Easy Street Capital | DSCR & Bridge Lending Nationwide

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
1y
@Yael Maroko
i would contact some lenders - in the past i have qualified for DSCR loans based on estimate rents, but in some cases have been offered worse terms than based on actual rents.
but - just curious, if the ARV for the DSCR loan is the same as the price paid at closing, what you seem to be proposing is going to be expensive - you'll close with some funding source (cash?) pay closing costs, then try to immediately refi and pay closing costs again on the DSCR loan?
2 Reply
Yael Maroko
OP
Investor · Atlanta GA · Member since 2019 · 35 posts · 20 votes
1y
That's what I want to avoid.. I want to have the loan at the closing. The down payment will be y own cash
0 Reply
- Ravi Punn
  Lender · NY · Member since 2025 · 11 posts · 15 votes
  1y
  Quote from @Yael Maroko:
  
  That's what I want to avoid.. I want to have the loan at the closing. The down payment will be y own cash
  Absolutely — great question, and one I get all the time.
  
  Yes, you can get a DSCR loan on a vacant property. If the rehab is light and the property is close to rent-ready, many lenders will use market rent comps (via Form 1007 or STR1007) to underwrite — no lease required, and no seasoning needed.
  
  If it still needs work, you may need a short-term bridge loan first and then refi into a DSCR once stabilized. But if it's clean and rentable, 75% LTV is definitely doable with the right FICO and DSCR.
  
  We recently closed one just like this — vacant duplex, no tenants, closed in under 2 weeks using projected rents.
  
  Happy to take a look at your deal structure if you want a second opinion — just shoot me a message.
  
  — Ravi Punn
  
  Easy Street Capital | DSCR & Bridge Lending Nationwide
  
  8 Reply
Mike GrudzienPro Member
Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
1y
Check with a lot of lenders. Compare options.
1 Reply
Elias HalvorsonBusiness Member
HI · Member since 2024 · 225 posts · 130 votes
1y
Simple answer, yes, you can and I'll echo what Ravi wrote.
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Andrew Zamboroski
Lender · Member since 2021 · 495 posts · 130 votes
1y
Quote from @Yael Maroko:

Hi,
Can I get a DSCR loan on an investment property at the time that I'm buying it even before its rented?
Lets say its an easy rehab and its vacant, the ARV won't be that much higher than the price I will pay at closing, will a lender give a 75% DSCR loan? (or maybe its a different type of loan?) With no seasoning? Will they take an average rent in the area to calculate DTI?
As long as the property is rent ready, yes you should be able to use market rent for qualifying for the loan. This should be standard 😀. If you ever need assistance, feel free to reach out!
1 Reply
Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
1y
Hi Yael,
Yes, there are DSCR programs that will allow vacant and also programs that have no or low seasoning requirements. Rates may be slightly higher than programs that require leases but it all depends on timing and the deal itself.
If the value is high enough, you could do a cash out based on the newly appraised value. If it's not much different, you'd probably be looking at a rate & term refinance ("delayed financing") based on the purchase price to get a better rate
310-848-9776
1 Reply
John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
1y
Yes, I've done 7 DSCR loans for properties that were vacant and needed some work. The lender will send an appraiser out to determine market rent. Side note- I always tell the appraisers the market rent and appraisal value I'm hoping for. And somehow my appraisals always come out at those numbers or higher. lol
2 Reply
Devin PetersonBusiness Member
Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
1y
Quote from @Yael Maroko:

Hi,
Can I get a DSCR loan on an investment property at the time that I'm buying it even before its rented?
Lets say its an easy rehab and its vacant, the ARV won't be that much higher than the price I will pay at closing, will a lender give a 75% DSCR loan? (or maybe its a different type of loan?) With no seasoning? Will they take an average rent in the area to calculate DTI?

Yael, The short answer is Yes. You can get a DSCR without the unit being rented as a purchase. The details are skewed and answers may vary depending on what lender you end up going with. The most common is that the lender will use the market rents on a vacant home to qualify for the DSCR requirement. If it is a refi DSCR loan, then you still will need to find a lender who is okay with property being vacant at time of closing and can use the market rents. There are a few out there that will do this no problem. Hope that helps. Best of luck!
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1 Reply
Kristen L GarnerBusiness Member
Lender · Phoenix, AZ · Member since 2021 · 451 posts · 287 votes
1y
Yes, you can purchase a vacant property using a DSCR loan. The lender will go off of the 1007 page in the appraisal for the rental amount to calculate the DSCR ratio. The 1007 page is similar to the page where they calculate the value of the property, but instead they pull comps and data for rental amounts from similar properties in your area. Most lenders will go up to 80% LTV for a DSCR purchase. Some even go up to 85% but the qualifying guidelines are stricter.
As far as the DSCR ratio you will want to hit 1+ to get the max LTV. If you go under 1 you can still get the deal done but you will likely get a hit in LTV or rate. And if your ratio is above 1.25+ you will likely get a better rate. Best of luck and if you want help running some numbers or seeing what rental comps are in your area, let me know!
[email protected]213-880-0434
2 Reply
- Yael Maroko
  OP
  Investor · Atlanta GA · Member since 2019 · 35 posts · 20 votes
  1y
  Quote from @Kristen L Garner:
  
  Yes, you can purchase a vacant property using a DSCR loan. The lender will go off of the 1007 page in the appraisal for the rental amount to calculate the DSCR ratio. The 1007 page is similar to the page where they calculate the value of the property, but instead they pull comps and data for rental amounts from similar properties in your area. Most lenders will go up to 80% LTV for a DSCR purchase. Some even go up to 85% but the qualifying guidelines are stricter.
  As far as the DSCR ratio you will want to hit 1+ to get the max LTV. If you go under 1 you can still get the deal done but you will likely get a hit in LTV or rate. And if your ratio is above 1.25+ you will likely get a better rate. Best of luck and if you want help running some numbers or seeing what rental comps are in your area, let me know!
  
  Thanks! Very clear explanation
  0 Reply
Tarik Turner
Lender · Hackensack, NJ · Member since 2016 · 1k+ posts · 372 votes
1y
Be sure to let the lender know prior to the appraisal, what needs to be repaired on the property. Would hate for you to apply for a 30 year mortgage then there is an issue that your lender feels should be repaired prior to closing.
Usually if you are talking about light items .. (paint. carpet, new appliances) You should be fine if it is more substantial than light work -(roof patchwork, mechanical damage ) you might want to work it out with the seller to get it repaired prior to purchasing. Nothing worse than paying for an appraisal that cannot be used to fund the loan especially when the issues could have been identified beforehand.
1 Reply
- Yael Maroko
  OP
  Investor · Atlanta GA · Member since 2019 · 35 posts · 20 votes
  1y
  Quote from @Tarik Turner:
  Be sure to let the lender know prior to the appraisal, what needs to be repaired on the property. Would hate for you to apply for a 30 year mortgage then there is an issue that your lender feels should be repaired prior to closing.
  Usually if you are talking about light items .. (paint. carpet, new appliances) You should be fine if it is more substantial than light work -(roof patchwork, mechanical damage ) you might want to work it out with the seller to get it repaired prior to purchasing. Nothing worse than paying for an appraisal that cannot be used to fund the loan especially when the issues could have been identified beforehand.
  
  Yes, good point. I do intend to buy a rent ready property, but I might find one which does require roof repairs, or other things that need more substantial attention.
  If that would be the case I will use HML and after the repairs I will refinance .
  Yael
  0 Reply
Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
1y
Quote from @Yael Maroko:

Hi,
Can I get a DSCR loan on an investment property at the time that I'm buying it even before its rented?
Lets say its an easy rehab and its vacant, the ARV won't be that much higher than the price I will pay at closing, will a lender give a 75% DSCR loan? (or maybe its a different type of loan?) With no seasoning? Will they take an average rent in the area to calculate DTI?

Hey Yael,
I am a little confused on the question. Are you structuring this as a Refi or Purchase?
If It's a purchase, and the rehab is only cosmetic, then generally you should be able to purchase the property with a DSCR loan as long as there is no deferred maintenance or structural repairs needed. The property does not have to be rented and market rent will be used to qualify.
If this is a refinance, lenders will want to see at least 3-6 months to cash out on the new appraised value. Since there is not too much variance on the ARV and Original Purchase Price, Most lenders would be able to do a delayed purchase refinance. Some lenders will allow 100% of the purchase price and rehab cost as long as it does not exceed 75% of the appraised value.
[email protected]818-269-7983
LuxePrivate Investments LLC 572 Reviews
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1 Reply
- Yael Maroko
  OP
  Investor · Atlanta GA · Member since 2019 · 35 posts · 20 votes
  1y
  Quote from @Erik Estrada:
  
  Quote from @Yael Maroko:
  
  Hi,
  Can I get a DSCR loan on an investment property at the time that I'm buying it even before its rented?
  Lets say its an easy rehab and its vacant, the ARV won't be that much higher than the price I will pay at closing, will a lender give a 75% DSCR loan? (or maybe its a different type of loan?) With no seasoning? Will they take an average rent in the area to calculate DTI?
  
  Hey Yael,
  I am a little confused on the question. Are you structuring this as a Refi or Purchase?
  If It's a purchase, and the rehab is only cosmetic, then generally you should be able to purchase the property with a DSCR loan as long as there is no deferred maintenance or structural repairs needed. The property does not have to be rented and market rent will be used to qualify.
  If this is a refinance, lenders will want to see at least 3-6 months to cash out on the new appraised value. Since there is not too much variance on the ARV and Original Purchase Price, Most lenders would be able to do a delayed purchase refinance. Some lenders will allow 100% of the purchase price and rehab cost as long as it does not exceed 75% of the appraised value.
  
  Hi Eric,
  Yes - it is purchase, meaning I will need the money for the closing of the property. If it will need more than a light rehab I will go a different route and use HML for the purchase, do the rehab and then refinance.
  My intention is to buy a rent ready home.
  Yael
  0 Reply
- Erik EstradaBusiness Member
  Lender · Member since 2022 · 6k+ posts · 1k+ votes
  1y
  Quote from @Yael Maroko:
  
  Quote from @Erik Estrada:
  
  Quote from @Yael Maroko:
  
  Hi,
  Can I get a DSCR loan on an investment property at the time that I'm buying it even before its rented?
  Lets say its an easy rehab and its vacant, the ARV won't be that much higher than the price I will pay at closing, will a lender give a 75% DSCR loan? (or maybe its a different type of loan?) With no seasoning? Will they take an average rent in the area to calculate DTI?
  
  Hey Yael,
  I am a little confused on the question. Are you structuring this as a Refi or Purchase?
  If It's a purchase, and the rehab is only cosmetic, then generally you should be able to purchase the property with a DSCR loan as long as there is no deferred maintenance or structural repairs needed. The property does not have to be rented and market rent will be used to qualify.
  If this is a refinance, lenders will want to see at least 3-6 months to cash out on the new appraised value. Since there is not too much variance on the ARV and Original Purchase Price, Most lenders would be able to do a delayed purchase refinance. Some lenders will allow 100% of the purchase price and rehab cost as long as it does not exceed 75% of the appraised value.
  
  Hi Eric,
  Yes - it is purchase, meaning I will need the money for the closing of the property. If it will need more than a light rehab I will go a different route and use HML for the purchase, do the rehab and then refinance.
  My intention is to buy a rent ready home.
  Yael
  
  You should be good then.
  [email protected]818-269-7983
  LuxePrivate Investments LLC 572 Reviews
  Website View Page
  1 Reply
Orlando De Los Santos
Lender · NY · Member since 2025 · 16 posts · 3 votes
1y
we can finance Vacant Properties using DSCR loans. we use the rental income from the 1007 form. however, not all lenders lend on vacant properties.
1 Reply
Joe Grespin
Rental Property Investor · Member since 2018 · 70 posts · 38 votes
1y
Yes, some lenders will do a DSCR loan at purchase even if the property is vacant—as long as the market rent supports the DSCR (usually via 1007 rent schedule).

No seasoning required in many cases, but LTV is typically based on purchase price, not ARV, especially if the rehab is light. 75% LTV is common if the numbers work. Just know that terms vary a lot by lender, so it's worth shopping around.
1 Reply
Floyd JohnsonPro Member
Real Estate Agent · Orlando, FL · Member since 2025 · 60 posts · 17 votes
1y
Yes to echo what many said. Vacant property qualifies for DSCR. However the appraisal will be the biggest thing if it needs some work to be "rentable" I made that mistake and the appraiser came back "subject to" some items needing to be finished. (They spell out everything at least) The loan could not close until those items were complete and they returned to verify the completion then signed off on the ARV and rental value. Had to sign waiver of responsibility and add insurance to small crew or pay big GC who already has insurance. Also need to think about timing as loan will not close until the 2nd appraiser confirms the completion. It can get done though if everyone works together.
1 Reply
Carrie Matuga
Lender · Riverside, CA · Member since 2017 · 248 posts · 98 votes
1y
@Yael Maroko

Yes—you can get a DSCR loan on a vacant property, even if it needs a little rehab.
Here’s what you need to know:

Vacancy
• For single-family homes or duplexes, full vacancy is totally fine.
• For triplexes or fourplexes, some vacancy is okay—but they generally can’t be completely vacant.

No Lease? No Problem.
Even if there’s no active tenant or lease, you can still qualify.
A DSCR lender will use a 1007 Rent Schedule (ordered with the appraisal) to determine market rent—and that’s what they’ll use to calculate the DSCR.

No DTI Required
DSCR loans don't use your personal debt-to-income ratio.
They’re based on the property’s ability to pay for itself:

• A 1.0 DSCR means the property breaks even.
• A 1.2+ DSCR usually unlocks better rates and smoother approvals.

Light Rehab Is Usually OK
If the property just needs cosmetic updates (aka a “lipstick remodel”), it’s typically not an issue.
But major repairs or deferred maintenance could disqualify it.

Appraisal Condition Rating Matters
The property must appraise in C1 to C3 condition.
• A C4 rating or worse is often a dealbreaker for DSCR loans.

1 Reply
Lisa Tatone
Member since 2025 · 4 posts · 1 vote
1y
Yes
1 Reply
Trina Woods
Lender · Member since 2022 · 15 posts · 3 votes
1y
Hi Yael! I can surely agree with everyone on the DSCR route.
Here’s how it typically works:

No seasoning required: With DSCR loans, we don't usually require rental income history or ownership seasoning — we base underwriting on projected market rents, even if the unit is vacant at closing. So you're not stuck waiting months to qualify.

Rents based on market comps: We’ll use the appraiser’s Form 1007 Rent Schedule to estimate market rent. That's the number used to calculate the DSCR (Debt Service Coverage Ratio), so as long as it supports a ratio we're comfortable with — usually 1.0 or above — you're in good shape.

Light rehab is okay: If it's a light rehab and you're not changing the footprint or layout, it still qualifies for a standard DSCR loan. However, if it's more than cosmetic or you're planning to reposition the asset, we might look at a short-term bridge or rehab loan first, then refi into DSCR after stabilization.

LTV: 75% LTV is common if the property and borrower profile meet guidelines, even with no tenant in place. We'll look at credit, reserves, and the projected income to support that.

I hope this helps!
1 Reply
Connor Hibbs
Lender · Ellington, CT · Member since 2024 · 210 posts · 103 votes
1y
Yes, you can. Depending on if there was rehab you can avoid LTV cuts as well if the DSCR is for a purchase then you can usually avoid LTV cuts on SFR and lower unit count properties. For refinances it is always better to have the property rented but is not always required although you may run into LTV reductions.
1 Reply
Deven Ziertman
Member since 2025 · 77 posts · 15 votes
1y
Yes, you can get a DSCR loan on a vacant property, especially if the rehab is light and the property is close to being rent-ready. Many lenders will use market rent comps (via Form 1007) to underwrite, with no lease or seasoning required. If the property still needs significant work, you might need a short-term bridge loan and then refinance into a DSCR loan once it's stabilized. If it's rentable, 75% LTV is possible with the right FICO and DSCR.
1 Reply
Brittany MinocchiBusiness Member
Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
1y
Yep!
Not all lenders require a lease in place, especially for a purchase vs. a refi. However - if it needs rehab in order to be livable or has any sort of deferred maintenance, it won't qualify for a DSCR loan. You mentioned that the ARV wouldn't be significantly higher once the work is completed, so it sounds like you may just be talking about cosmetics, in which case you should be fine. :)
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Jesse R Wien
Lender · Arizona/Wisconsin · Member since 2022 · 17 posts · 3 votes
1y
So as you know, that answer is yes, but I can do you one better. We offer up to 85% DSCR. We also offer no appraisal seasoning loan (75%) so you can use the higher appraised value
0 Reply
Adam Summerer
Lender · Franklin, TN · Member since 2026 · 36 posts · 2 votes
8h
Yes — a lot of DSCR desks will close vacant or light-rehab purchases on market rents (Form 1007) instead of a signed lease, as long as the property is rent-ready or the work is truly cosmetic. Heavy unfinished rehab is where they push you to bridge first, then term-out. Ask in writing: market-rent vs lease, DSCR floor (~1.0x vs expanded lower tiers), and whether LLC vesting is required at closing so your cash-down plan doesn't get rewritten mid-file.
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