Principal Underwriting Desk FAQ · Stephen R. Mannenbach, J.D., MBA (NMLS #2549621)

Institutional DSCR, STR, Bridge & Multifamily Underwriting FAQ

Direct, citations-ready answers on 2026 DSCR underwriting formulas, LTV caps, AirDNA short-term rental income, BRRRR seasoning rules, LLC vesting, and prepayment step-downs from Loan Daddy LLC (NMLS #2827624 · AZ CMB #CMB-2016143 · CA CFL #60DBO-218873).

How is DSCR calculated on 1–4 unit vs. 5–9 unit investment properties?

On 1–4 unit residential rentals, DSCR = Gross Monthly Rent (Form 1007 or executed lease) ÷ Monthly PITIA (Principal, Interest, Taxes, Insurance, and HOA). On 5–9 unit and 10+ unit commercial multifamily properties, DSCR = Annual Net Operating Income (NOI) ÷ Annual Debt Service.

What is the maximum LTV for DSCR purchase and cash-out refinance loans in 2026?

Institutional wholesale DSCR credit shelves arranged by Loan Daddy LLC (NMLS #2827624) offer up to 80% LTV on purchases (85% CLTV where seller carryback is permitted), 80% LTV on rate-and-term refinances, and 75% LTV on cash-out refinances.

Can I qualify for a DSCR loan with a ratio below 1.00x (No-Ratio DSCR)?

Yes. Select wholesale credit shelves offer sub-1.00x (0.75x–0.99x) and No-Ratio DSCR programs up to 75% purchase LTV and 70% cash-out LTV for borrowers with 680+ middle FICO scores and 6–9 months of PITIA reserves.

How are Short-Term Rentals (Airbnb & VRBO) underwritten for DSCR loans?

Wholesale STR DSCR shelves accept three qualification methods: (1) AirDNA Rentalizer annual revenue projections (ideal for new purchases), (2) trailing 12-month Airbnb/VRBO host payout ledgers, or (3) an STR-specialized Appraiser Form 1007 rent schedule.

Can I close a DSCR loan in an LLC, Series LLC, or Limited Partnership?

Yes. Business-purpose DSCR, RTL Fix-and-Flip, and commercial multifamily loans are designed to close directly in single-purpose LLCs, Series LLCs, LPs, S-Corporations, or Revocable Living Trusts.

What prepayment penalty structures are available on wholesale DSCR loans?

Borrowers can select from 5-year (5/4/3/2/1), 3-year (3/2/1), 2-year (2/1), 1-year (1%), or Zero Prepayment Penalty (No-PPP) structures depending on their hold or refinance horizon.

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