DSCR Loans With No Rental History
Buying a property that's never been rented doesn't disqualify you from DSCR financing.
By Ryan Kennedy, NMLS #1434300 · Orlando Mortgage Broker, Icon Mortgage Group
Buying a property that's never been rented doesn't disqualify you from DSCR financing.
By Ryan Kennedy, NMLS #1434300 · Orlando Mortgage Broker, Icon Mortgage Group
A common misconception is that DSCR loans require an existing tenant or rental track record. In reality, most DSCR purchases involve a property with no rental history at all — that's simply how purchase transactions work.
For a purchase (as opposed to a refinance of an already-rented property), lenders use a projected rental income report instead of actual collected rent. For long-term rentals, that's typically the Fannie Mae 1007 rent schedule; for short-term rentals, it's a market-based projection report like AirDNA. Either way, the appraiser or third-party report estimates what the property should rent for based on comparable properties in the area.
Many Orlando-area vacation home communities sell new-construction homes specifically marketed to investors. These qualify the same way — via a projected income estimate — since there's no possible rental history on a brand-new home.
If a projected report comes back lower than you hoped, that doesn't necessarily kill the deal — it may mean adjusting the down payment, comparing a long-term vs. short-term income approach, or reconsidering the specific property's price relative to its earning potential.
If you already own the property and are refinancing to pull cash out or convert it into a short-term rental, the same projected-income approach generally applies unless you already have documented short-term rental income to show instead.
Not having rental history is the norm, not the exception, on a DSCR purchase — it's built into how the program works.