Rental Income Loan Options
A rental income loan is financing for an investment property where the lender considers the property’s rental income as part of its underwriting review. Depending on the program, the lender may use a lease, an appraisal-based market-rent analysis, tax returns, bank statements, or other documentation.
NorthStar Funding reviews rental income loan options for eligible investment-property borrowers. In addition, the lender and complete loan file determine occupancy, property type, income calculation, debt, credit, assets, reserves, loan purpose, and pricing.
Request a rental income loan review or contact NorthStar Funding.
When rental income can support a loan review
- For example, an investor may purchase or refinance a qualifying rental property.
- In addition, a lender may review the property’s existing lease or market-rent analysis.
- Some borrowers want to compare documented rental-income underwriting with a DSCR loan option.
- Finally, the lender may evaluate a single-property or portfolio scenario under its current guidelines.
How lenders evaluate rental income
First, the lender identifies the property, transaction type, and documentation method. It then reviews the complete file, which may include leases, rental history, appraisal information, tax returns, property expenses, mortgage payment, insurance, taxes, homeowner-association dues, borrower credit, assets, reserves, and other debts. Next, current lender guidelines determine how the lender treats each item.
Rental income loan FAQs
Is a rental income loan the same as a DSCR loan?
Not always. A DSCR loan focuses on a property’s cash flow relative to its housing payment. A rental income loan may use rental income as part of a broader underwriting review. As a result, the lender selects the method that applies to the program and loan file.
Can I use rental income from a new lease?
Some programs may consider a new lease or market-rent analysis. However, the lender determines whether the documentation, property, borrower profile, and transaction meet its requirements.
Can this be used for a purchase or refinance?
Availability varies by lender and loan program. Therefore, a review can identify whether an eligible purchase, rate-and-term refinance, or cash-out refinance option fits the complete loan file.
What should I gather for a review?
Finally, start with the property address, purchase contract or current mortgage information, lease or rental history if available, property-expense details, asset statements, and the borrower information requested by the lender.
Start an application · DSCR loan options · Purchase options · Refinance options · Contact NorthStar Funding · Call (800) 917-1595
This page provides general information; it is not a commitment to lend. All loans remain subject to credit, property, income, underwriting, and applicable legal requirements.
For general reference on documented rental income reported on Schedule E, see the Fannie Mae Selling Guide’s Schedule E rental-income guidance.