Question 1

Can I use projected rent if the property is vacant?

Accepted Answer

Yes. The appraiser provides a market rent analysis that lenders use for DSCR calculation. You don't need a tenant in place at closing, though having a lease helps with rate pricing.

Question 2

What if the DSCR comes in at 0.95 instead of 1.0?

Accepted Answer

Some lenders offer programs down to 0.75 DSCR with larger down payments, typically 30-35%. Rates run higher, but the loan still closes if credit and reserves qualify.

Question 3

Do I need reserves for a DSCR loan in Live Oak?

Accepted Answer

Most lenders require 6-12 months of reserves per property. The exact amount depends on loan size, DSCR, and how many properties you already own.

Question 4

Can I do cash-out refinance with DSCR?

Accepted Answer

Yes. DSCR cash-out refinances work the same as purchases. Lenders calculate DSCR on the new loan amount and require the rental income to support the higher payment.

Question 5

How do lenders verify rental income for DSCR?

Accepted Answer

They use the appraisal's market rent opinion, not your actual lease. If you have a signed lease, lenders may use that figure if it matches or exceeds market rent.

DSCR Loans in Live Oak: Qualify on Rental Income, Not Personal W-2