Question 1

Can I use projected rent if the property is vacant?

Accepted Answer

Yes. Appraisers provide a market rent analysis for vacant properties. Lenders use that figure to calculate DSCR, though some require a lease in place for best pricing.

Question 2

Do DSCR loans require reserves?

Accepted Answer

Most lenders want 6-12 months of mortgage payments in reserves. The exact amount depends on credit score, DSCR ratio, and how many financed properties you already own.

Question 3

What if my DSCR is below 1.0?

Accepted Answer

Some lenders approve DSCR as low as 0.75 with larger down payments and higher rates. You're essentially betting on rent growth or property appreciation to close the gap.

Question 4

Can I buy multiple Norwalk properties with DSCR loans?

Accepted Answer

Yes. DSCR programs don't have Fannie Mae's 10-financed-property cap. Each property qualifies independently based on its own rental income, not your total portfolio.

Question 5

How do lenders handle HOA fees in DSCR calculations?

Accepted Answer

HOA dues get added to your mortgage payment when calculating DSCR. So if rent is $2,500 and your payment plus HOA is $2,200, your ratio is 1.14, not 1.25.

DSCR Loans in Norwalk: Income-Free Qualifying for Investment Properties