Are there any property type restrictions with DSCR loans?

Single-Family Rentals Definition Single-family rentals are traditional rental homes with one unit. These are the most straightforward property type for DSCR loans, with clear rental income potential and market comparables available.

Single-family rentals are often the easiest to finance because lenders have extensive data on rental rates and market performance. They're also typically the most liquid property type, making them attractive to both lenders and investors.

If you're new to DSCR loans, single-family rentals are an excellent starting point.

Multi-Family Properties Definition Multi-family properties include duplexes, triplexes, and fourplexes (2-4 units). Each unit is evaluated for rental income potential, and the property must meet minimum DSCR requirements based on total rental income.

Multi-family properties can be excellent DSCR loan candidates because they offer multiple income streams from a single property. Lenders appreciate the diversification that comes with multiple units - if one unit is vacant, the others can still generate income.

This makes multi-family properties particularly attractive for DSCR financing.

Condominiums and Townhomes Definition Condominiums and townhomes include non-warrantable condos. They must meet lender HOA guidelines and check for rental restrictions. Comparable rental data is required for qualification.

Condos and townhomes are popular DSCR loan properties because they often require less maintenance and management than single-family homes. Even non-warrantable condos can qualify for DSCR loans, which is great news for investors looking at properties that traditional lenders might reject.

The key is ensuring the HOA allows rentals and that you have good comparable rental data.

Manufactured Homes Definition Manufactured homes must be on permanent foundation and classified as real property (not personal property). Comparable rental data must be available and the property must meet lender condition requirements.

Manufactured homes can be excellent DSCR loan candidates, especially in areas where they're common and have strong rental demand. The key requirements are straightforward - the home must be permanently attached to the land and classified as real estate rather than personal property.

Many lenders are comfortable with manufactured homes as long as they meet these basic criteria.

New Construction Properties Definition New construction properties are built for rental use. Lenders use market rent analysis to project rental income for new properties, and construction must be completed before financing.

New construction properties can be excellent DSCR loan candidates because they often command higher rental rates and require less immediate maintenance. Lenders are comfortable with new construction as long as the property is completed and ready for occupancy.

The market rent analysis helps lenders understand the income potential, making new construction properties attractive for DSCR financing.

Primary Residences Definition Primary residences are properties you live in as your main home. DSCR loans are not available for primary residences because they are designed for investment properties that generate rental income.

Second Homes and Vacation Properties Definition Second homes and vacation properties are personal vacation properties used for personal enjoyment. DSCR loans require the property to be used primarily for rental income generation, not personal use.

Non-Rental Properties Definition Non-rental properties are properties that will not be used for rental income generation. The property must be purchased for investment purposes and generate rental income to qualify for DSCR financing.

Commercial-Only Properties Definition Commercial-only properties are properties with no residential component. DSCR loans focus on residential rental income, so properties used exclusively for commercial purposes are not eligible.