“I want to buy a rental.”
Can I qualify for a rental property loan with the rent?
Often, yes. A rental property loan can qualify on the rent the home brings in, not your paycheck. No tax returns and no pay stubs. If the rent covers the payment, the property can qualify. Credit, savings and a bigger down payment still matter, and these loans can cost more than a loan on your income.
Quick answers
No income paperwork?
None needed. The rent is the income, from the lease or the appraiser’s rent estimate.
Renting it out in season?
That rent counts as income, not just a long lease.
Keeping the old house as a rental?
Its rent can help it qualify. Ask how that fits with buying your next home.
Does it fit you?
2 quick questions. No signup. No credit pull.
What you'll need
- The property address and the rent (a lease, or what it should rent for)
- Statements for your savings
- A photo ID
What happens after I send the address?
What is a DSCR loan?
DSCR stands for debt service coverage ratio. It compares the monthly rent to the full monthly payment, including taxes and insurance, plus any HOA dues. If the rent covers the payment, the ratio is one or more, and the property can qualify.
How does the rent qualify the loan?
The lender compares the rent to the payment on the home. If the rent covers the payment, the property can qualify. Your paycheck doesn’t have to.
The rent comes from the lease, or from the appraiser’s estimate of what the home should rent for.
Who uses a loan like this?
Anyone buying a home to rent out. It’s for rentals only, so you don’t live there. For example:
- People buying a house, condo or small building to rent out
- Owners keeping their old home as a rental after they move
- Self-employed buyers whose tax returns show less than they make
What still matters besides the rent?
Your credit and your savings still count, and so does the down payment. A rental usually needs a bigger down payment than a home you live in.
Your loan officer gives you the numbers for your property, with the rate and APR.
Why isn’t this a regular loan?
It’s a non-QM loan. That means it sits outside the standard Qualified Mortgage rules, which is how it can skip your tax returns and pay stubs.
It can cost more than a loan on your income, and a prepayment penalty may apply in the first few years. Your loan officer shows every cost before you decide.
Questions people ask
What kinds of property?
Houses, condos and small buildings with two to four units. The home has to be a rental. You don’t live there.
Does it cost more?
It can. A loan on the rent can cost more than a loan on personal income, and a prepayment penalty may apply in the first few years.
Can I live in the home?
No. This loan is for rentals only. If you’ll live there, ask about a loan for a home you live in.
Do I need a lease in place?
No. If the home isn’t rented yet, the appraiser’s estimate of what it should rent for can count.
What if the rent doesn’t cover the payment?
A bigger down payment lowers the payment, which can help the rent cover it. Or another loan may fit better. Your loan officer runs both.
Does my personal income matter at all?
It isn’t used to qualify. The rent is the income for this loan. Your credit and savings still count.
Does Home First Financial offer DSCR loans in California?
Yes. Home First Financial offers rental property loans across California that qualify on the rent, not your paycheck. Also called DSCR loans. Subject to qualification.
Talk to a loan officer
Call or email a licensed loan officer.
The application takes about 15 minutes, on the secure site we use. Do what you can, and your loan officer calls to fill in the rest.
Prefer to meet in person? Our main office is in Tustin, by appointment.
The fine print
Non-QM financing for investment property; the buyer does not live there. Non-QM means the loan sits outside the standard Qualified Mortgage rules, so it can qualify on the rent instead of your income. Subject to borrower and property qualification and current program terms. A loan on the rent can cost more than a loan on personal income. A prepayment penalty may apply in the first few years. Examples are estimates, not quotes. Not a commitment to lend.
Also called: a DSCR (debt service coverage ratio) loan.
Home First Financial is not affiliated with HUD, FHA, VA, USDA, CalHFA or any government agency.
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