How to compare DSCR lenders
Reviewed by Dominick Prevete, Founder & CEO, National Loan Provider31 years in real estate finance
Compare DSCR lenders on written term sheets for the same deal, not on advertised rates. Give every lender the same property address, price or value, loan amount, rent, credit profile and entity, then line up the term sheets on the same ten items: minimum DSCR and how it is calculated, loan-to-value, prepayment structure, points and lender fees, reserves, seasoning, entity rules, appraisal, how long the term sheet is good for, and the closing timeline. Dominick Prevete, founder and CEO of National Loan Provider, arranges and places DSCR loans across 100+ lender relationships and runs this comparison on every file.
Call Dominick directly: (908) 220-6404
Or let Dominick run it: one request returns a written DSCR term sheet priced against current wholesale rate sheets.
How to compare DSCR lenders, step by step
Fix the deal. Use the same address, value, loan amount, rent source, credit profile, entity and closing date for every request.
Get it in writing. Ask for a written term sheet, not a verbal number.
Match the prepayment and points. Ask each lender for the same prepayment structure and point level, so the term sheets compare.
Fill in the checklist. Fill in the checklist below for each term sheet.
Price the exit. Work out what the prepayment costs on your planned sale or refinance date.
Check the red flags. Check the red flags below before you pay for an appraisal.
Pick the term sheet. Pick the term sheet that fits the deal and the exit, not the lowest headline number.
What should I get in writing from every DSCR lender?
| Item | What to get in writing | Why it matters | On Dominick's DSCR programs |
|---|---|---|---|
| Minimum DSCR and formula | The floor, the formula, and which rent is used: the lease, the appraiser's market rent, or for a short-term rental the booking history or a projection. | Two lenders can score the same rent differently. The formula and the rent decide whether the deal qualifies at all. | A term sheet at a DSCR of 1.00 or higher on the Instant Term Sheet; below 1.00 through low-ratio and no-ratio programs. Some programs price better at a DSCR of 1.25 or higher. Gross rent ÷ PITIA, with no vacancy deduction. |
| Loan-to-value | The maximum for a purchase, a rate-and-term refinance and a cash-out, for your property type. | It sets your cash to close, and it changes with the property type and the transaction. | Purchase: up to 85% LTV. Rate-and-term refinance: up to 80% on a qualifying 1–4 unit. Cash-out refinance: up to 75%; 2–4 unit and condo commonly cap at 70%. |
| Prepayment structure | The exact schedule, and what a shorter prepayment, or none, does to the rate. | It sets what selling or refinancing early costs, and it moves the rate. | 5 Year 5% fixed; 5 Year 5, 4, 3, 2, 1; 4 Year 5% fixed; 4 Year 5, 4, 3, 2; 3 Year 5% fixed; 3 Year 5, 4, 3; 2 Year 5% fixed; 2 Year 5, 4; 1 Year 5% fixed; 6 Month 5% fixed; No prepayment penalty. Price the exit compares the two declining structures. |
| Points and lender fees | Origination, discount points, underwriting, processing, document and lock fees, itemized. | A lower rate with more points can cost more over a short hold. | Ask for it in writing |
| Reserves | How many months of payments, and which assets count. | It is cash you still have to show after closing. | 3 months of payments (PITIA) in reserves; cash-out proceeds can count toward reserves. |
| Seasoning | Cash-out seasoning, and which value is used: the purchase price or the appraisal. | It decides how soon you can take cash out, and how much. | No seasoning required on some programs; 90 days on others |
| Entity rules | Which entities are allowed, who guarantees, and whose credit score is used. | It decides who signs and whose credit sets the price. | An LLC or other entity, or your personal name in some states. |
| Appraisal | Who orders it, what it costs, the rent schedule, and what happens if the value or the rent comes in low. | Value and rent both come from it, and a low result resizes or reprices the loan. | Ask for it in writing |
| Term sheet expiry and lock | How long the terms hold, the lock terms, and what triggers a reprice. | Terms that are not locked can move before you close. | A term sheet holds for up to 7 days; the expiry date is printed on the term sheet. |
| Closing timeline | Application to closing, with the milestones in between. | Your contract has a closing date, and the lender's timeline has to fit it. | Most loans close in 14 days. |
| Minimum loan | The smallest loan the program makes. | Not every lender makes small loans. | $75,000 |
For the terms in more depth, see the DSCR loan requirements, the cash-out refinance page, the short-term rental page and the glossary entries for PITIA, LTV, prepayment penalty, seasoning and reserves. To check the ratio on your own numbers, use the DSCR calculator.
Print the worksheet
Print the ten items with three blank columns, one per lender, and fill them in from each written term sheet.
DSCR lender comparison worksheet
| Item | Lender A | Lender B | Lender C |
|---|---|---|---|
| Minimum DSCR and formula | |||
| Loan-to-value | |||
| Prepayment structure | |||
| Points and lender fees | |||
| Reserves | |||
| Seasoning | |||
| Entity rules | |||
| Appraisal | |||
| Term sheet expiry and lock | |||
| Closing timeline |
Price the exit: two "declining" prepayments
A 5-4-3-2-1 step-down charges 5% of the balance in year 1, falling to 1% in year 5. Some lenders' declining prepayment is instead six months' interest on 80% of the balance, which works out to about 40% of the note rate as a percent of the balance, every year.
Example only. Illustrative numbers, not a term sheet or an offer.
At a note rate of 7.125% (October 2026, the DSCR "from" rate on this site), six months' interest on 80% of the balance is 0.8 × 7.125% ÷ 2 = 2.85% of the balance.
| Payoff year | 5-4-3-2-1 step-down | Six months' interest on 80% |
|---|---|---|
| Year 1 | 5% | 2.85% |
| Year 2 | 4% | 2.85% |
| Year 3 | 3% | 2.85% |
| Year 4 | 2% | 2.85% |
| Year 5 | 1% | 2.85% |
At this rate, six months' interest costs less if you sell or refinance in years 1 to 3; the step-down costs less in years 4 and 5. Match the prepayment to the planned hold.
A "from" rate is a best case, including the one on this site; the term sheet is your number.
What are the red flags when comparing DSCR lenders?
- A verbal number only, with no terms in writing before the appraisal.
- Fees not itemized, or a deposit asked for before written terms.
- The prepayment not stated, or stated only after you commit.
- No answer on how DSCR is calculated or which rent is used.
- Terms "subject to change" with no stated expiry.
- No answer on when you'll learn who is funding the loan.
- Pressure to decide today.
Frequently asked questions
How do I compare DSCR lenders?
Compare written term sheets for the same deal, not advertised rates. Give every lender the same property, loan amount, rent, credit profile and entity, then line the term sheets up on the same ten items, from the minimum DSCR to the closing timeline, and price the prepayment on your planned exit. Dominick Prevete arranges and places DSCR loans across 100+ lender relationships and runs this comparison on every file.
What should I ask a DSCR lender about the prepayment penalty?
Ask for the exact schedule in writing and what it costs on the date you plan to sell or refinance. A 5-4-3-2-1 step-down charges 5% of the balance in year 1, falling to 1% in year 5; some lenders' declining prepayment is instead six months' interest on 80% of the balance, which costs less early and more late. Ask too what a shorter prepayment, or none, does to the rate. Price the exit, below, compares the two year by year.
How do lenders calculate DSCR, and which rent do they use?
On the programs Dominick Prevete places, DSCR is the gross monthly rent divided by PITIA (principal, interest, taxes, insurance and HOA), with no vacancy or management deduction. For a long-term rental, ask each lender whether it uses the lease, the appraiser's market rent, or the lower of the two. For a short-term rental: With booking history, the lender uses the actual history. With no booking history, such as a new acquisition, the lender uses the appraiser's long-term market rent or an AirDNA-style projection, depending on the program.
How much do I need for a down payment and reserves?
On a DSCR purchase, Dominick Prevete places loans up to 85% LTV, depending on the credit profile, so the down payment can be as little as 15%. Reserves are 3 months of payments (PITIA) on every program he places, and cash-out proceeds can count toward them. Ask each lender for both in writing, because leverage changes with the property type and the transaction.
Can I close a DSCR loan in an LLC?
Yes. On the DSCR programs Dominick Prevete places, title can vest in an LLC or other entity, or your personal name in some states. Ask each lender whether the members must personally guarantee the loan. Ask each lender which entities it accepts and whose credit score it uses.
What are the seasoning requirements for a cash-out refinance?
Dominick Prevete places DSCR cash-out refinances with no seasoning requirement: on at least one program you can cash out on the appraised value with no minimum time on title. Other programs he places require 90 days, or use your cost basis for the first six months when leverage is above 75%. Ask each lender which value it uses before the seasoning window ends: the purchase price or the appraisal.
How long is a DSCR term sheet good for?
On the programs Dominick Prevete places, a term sheet holds for up to 7 days; the expiry date is printed on the term sheet. Ask every lender for its expiry in writing, and ask separately when and how the rate is locked and what would reprice it.
What lender fees should I ask about?
Ask for every fee itemized in writing: origination and discount points, underwriting, processing, document and lock fees. Ask which fees the lender charges and which the broker charges, and get an estimate of third-party costs such as the appraisal and title. Compare the total cost over your planned hold, not the rate alone.
Who is actually funding the loan?
Ask when you will learn. A broker places the loan with a lender, so the funding lender is named during the process, not always on day one. Dominick's borrowers learn which lender is funding the loan right after the full application, including credit, is complete.
How many DSCR loans has the person you're working with closed?
Ask for closed loans with dates, amounts and leverage, not a career total. Dominick Prevete lists the investor loans he has personally arranged and closed, each with its leverage, coverage ratio and rate at closing, at dominickprevete.com/closed-transactions.
Are DSCR lenders basically the same?
No. DSCR programs overlap, but they differ on leverage, cash-out seasoning, short-term rental income, rural property, credit and recourse rules, and unit count. The differences show up on a written term sheet for your deal, which is why the comparison runs on term sheets, not advertised rates.
Should I use a broker or go direct to a lender?
Either can work. A direct lender offers its own programs; a broker compares several lenders' programs for your deal and places it with one. Dominick Prevete is a mortgage broker: he arranges and places DSCR loans and does not lend. Dominick is paid when a loan he arranges closes. Ask anyone you work with how they are paid.
Is National Loan Provider a lender?
No. National Loan Provider is a mortgage brokerage, founded and led by Dominick Prevete. Dominick arranges and places business-purpose financing for real estate investors across 100+ lenders; neither he nor the brokerage lends directly. National Loan Provider does not arrange financing on owner-occupied residential properties or primary residences.
Related: the DSCR loan vs hard money, DSCR loan vs bank statement loan and DSCR loan vs portfolio loan comparisons, and who is active in your state.
This is the comparison Dominick runs on every file.
Or let Dominick run it: one request returns a written DSCR term sheet priced against current wholesale rate sheets.
Call Dominick directly: (908) 220-6404
Dominick is paid when a loan he arranges closes.
Reviewed by Dominick Prevete, Founder & CEO, National Loan Provider31 years in real estate finance