Question 1

Can I use a DSCR loan on a property with a vacant unit?

Accepted Answer

Yes, in many cases—but the vacant unit cannot count toward qualifying rent. Lenders typically underwrite only documented, market-rate income from occupied units (leases) or a licensed appraiser’s rent schedule. If one unit is vacant on a 2–4 family, your DSCR is calculated on occupied income only, which may push the ratio below program minimums until the unit is leased.

Question 2

Do DSCR lenders accept Airbnb or short-term rental income?

Accepted Answer

A growing number of Non-QM investors accept STR income, but documentation is stricter than long-term leases. Expect to provide 12 months of platform statements, an STR revenue pro forma, or a short-term rent estimate from the appraiser. Many programs haircut STR projections by 10–25% compared to gross bookings to account for seasonality and turnover.

Question 3

What is the minimum DSCR ratio most lenders require in 2026?

Accepted Answer

The industry floor for most DSCR programs remains 1.00—meaning the property’s net operating income must at least equal the full PITIA payment. Scores of 1.20–1.25+ often unlock better pricing and higher LTV. Below 1.0, the deal does not cash-flow under standard DSCR guidelines and is typically declined unless a rare exception program applies.

Question 4

Can I close a DSCR loan in my LLC instead of my personal name?

Accepted Answer

Most DSCR programs allow vesting in a single-purpose LLC, especially for investment properties. You will still sign a personal guarantee in almost all cases. The LLC must be formed before closing, and lenders may require an operating agreement and EIN. This is standard for portfolio investors scaling beyond 5–10 doors.

Question 5

Can I do a cash-out refinance with a DSCR loan?

Accepted Answer

Yes. DSCR cash-out refinances are widely available on stabilized rentals with 6–12 months seasoning, though maximum LTV is usually lower than on a purchase—often 70–75% for cash-out versus up to 80% on acquisition. Proceeds are commonly used to fund the next acquisition or renovate a value-add unit without documenting personal income.

Question 6

Do you use gross or net deposits for a bank statement loan?

Accepted Answer

Lenders start with gross eligible deposits—the total of qualifying inflows over 12 or 24 months—then apply an expense factor (often 50% for business accounts, sometimes lower for sole proprietors with documented low overhead). Net qualifying income is gross deposits minus that factor, divided by the number of months. Transfers between your own accounts and one-time spikes are excluded.

Question 7

Can I combine personal and business bank statements?

Accepted Answer

Generally no—you must choose either personal or business statements for the full lookback period. Mixing accounts creates audit risk and double-counting. If you run expenses through a personal account, a personal bank statement program with a higher expense factor may still be the cleaner path. Your loan officer will model both scenarios before you submit.

Question 8

Is a 12-month or 24-month bank statement lookback better?

Accepted Answer

Twelve months is faster and works when recent income is stable or rising. Twenty-four months helps if your most recent year was an anomaly—high growth, a slow quarter, or a one-time contract. Lenders often average the net monthly figure across the full period, so a strong prior year can offset a soft current quarter when you use 24 months.

Question 9

Will I still need to provide tax returns on a bank statement loan?

Accepted Answer

Most bank statement Non-QM programs do not require personal tax returns for income qualification. You will still sign IRS Form 4506-C for fraud prevention, and lenders may request returns if deposits clearly contradict filed AGI. The product is built for borrowers whose tax returns understate true cash flow due to depreciation, write-offs, or pass-through losses.

Question 10

Can a CPA profit & loss statement replace bank statements?

Accepted Answer

Some lenders offer a P&L-only program with a CPA-prepared statement covering 12 months, but it is a separate product—not a substitute within a standard bank statement guideline. P&L programs often cap LTV lower and require the CPA to hold an active license and sign a certification. Bank statements remain the most flexible option for self-employed borrowers.

Question 11

Can I buy a U.S. property with an ITIN but no U.S. credit score?

Accepted Answer

Yes. ITIN programs are designed for borrowers who file U.S. taxes but lack a traditional FICO score. Lenders rely on alternative credit—rent history, utility bills, or foreign credit translated via a recognized vendor—plus larger down payments, often 20–25% minimum. ITIN must be active and match IRS records; expired or pending ITINs will not qualify.

Question 12

Are ITIN loans available on investment properties or only primary homes?

Accepted Answer

Both exist, but investor ITIN financing is a smaller, more specialized market. Primary residence ITIN loans are more common with full-doc or bank statement hybrids. Investment properties may require DSCR-style qualification on rents, higher reserves (6–12 months PITIA), and lower LTV caps. Always confirm occupancy and visa/ residency status with your lender upfront.

Question 13

What is the difference between an ITIN loan and a foreign national loan?

Accepted Answer

An ITIN loan serves borrowers who pay U.S. taxes and hold a valid Individual Taxpayer Identification Number but may not have an SSN. A foreign national loan targets non-resident buyers with no U.S. tax filing obligation, typically for investment property only, with 30–40% down and no U.S. credit requirement. Documentation and reserve rules differ materially between the two.

Question 14

Can gift funds from overseas be used for a foreign national down payment?

Accepted Answer

Yes, with full paper trail. Expect to wire from a documented source, provide a gift letter, and show the donor’s relationship to you. Lenders scrutinize international gifts for AML compliance—sudden large transfers without history may delay closing. Work with your loan officer before moving funds so the sourcing narrative matches underwriting expectations.

Question 15

If I obtain an SSN later, can I refinance out of an ITIN mortgage?

Accepted Answer

Absolutely. Many ITIN borrowers refinance into conventional or agency products once they have 24 months of U.S. credit history and a valid SSN. Plan for seasoning: pay on time, keep utilization low, and retain the same property address when possible. A refinance also lets you drop rate overlays common on ITIN initial pricing.

Non-QM FAQ

Non-QM FAQ