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Reviewed by David Ghazaryan, Mortgage Broker, NMLS 1486726 · iQRATE Mortgages, NMLS 1862492 · Last updated: November 12, 2026
What is a DSCR loan for San Francisco, CA rentals? A DSCR (debt service coverage ratio) loan is a mortgage for an investment property that qualifies on the property's rent instead of your personal income. The lender divides the monthly rent by the full monthly payment, called PITIA (principal, interest, property taxes, insurance and HOA dues). Lenders still check your credit, assets, reserves and the appraisal. It is business-purpose financing for non-owner-occupied rentals only, so you can't live in the home. iQRATE Mortgages is a licensed California mortgage broker (company NMLS 1862492) that compares wholesale lenders for these files, and it is not a lender itself.
Start a DSCR application · or call (702) 766-3744 · 5.0 stars from 87 reviews on Experience.com (October 2026)
The qualifying math is one division: monthly rent over the full monthly housing payment. A ratio near 1.00 means rent roughly covers the payment; higher means more cushion; lower means the rent falls short. Nothing about your W-2s, tax returns or debt-to-income ratio enters that calculation, which is why this path suits investors with complex income, several properties or a large share of write-offs. The details that move approval are the same everywhere, but San Francisco changes the inputs: very high prices, rent rules on older buildings, and short-term rental limits.
| What the lender looks at | Why it matters for San Francisco rentals |
|---|---|
| Monthly rent (lease or market rent from the appraisal) | Most multi-unit buildings built before 1979 fall under the city's Rent Ordinance, so lenders use the current, rent-controlled rents rather than market rents on those buildings. |
| PITIA (full payment) | Property tax resets to the purchase price under Proposition 13 (about 1.1–1.3% of price in total), so a high price lifts the tax line even before interest. |
| Credit score and reserves | Still verified. Reserves matter more on high-balance loans because the payment you must cover is larger. |
| Down payment and loan-to-value | A larger down payment lowers the loan and therefore the payment you must cover with rent; terms vary by lender and program, so we confirm them on your file. |
| Prepayment penalty choice | DSCR loans can carry one. A loan that saves money today can become expensive if you sell or refinance before it expires. |
| Property type | Single-family, condo and small multi-unit all appear on San Francisco listings; tenancy-in-common (TIC) shares need a different structure (see the FAQ). |
Enter your own monthly figures below. The calculator divides rent by PITIA and shows the ratio. It is a planning tool only and not a loan offer or approval.
Why can a DSCR loan carry a prepayment penalty at all? Regulation Z limits prepayment penalties on most consumer mortgages, but credit extended primarily for a business purpose, such as a loan on a non-owner-occupied rental held as an investment, is outside that consumer rule. See the CFPB's Regulation Z, 12 CFR 1026.43. That is also why DSCR financing is available only for investment property, never for a home you or a family member will live in.
The practical result: when price is high relative to rent, the rent-to-payment ratio becomes the binding constraint, not your income. That is the opposite of a conventional purchase, and it is the first thing we test before you write an offer. A larger down payment, a longer-term lease, or a different property type can each change the answer.
Most multi-unit buildings built before 1979 are under the city's Rent Ordinance, with limits on rent increases and evictions. A DSCR loan on those buildings is underwritten on current rents, so a buyer pricing a deal on projected market rents may find the lender's number lower than theirs.
Only a permanent resident can register a home as a short-term rental, and unhosted stays are capped at 90 nights a year (California short-term rental laws overview). Investment properties can't be short-term rentals, so a San Francisco DSCR purchase should be sized on a long-term lease.
San Francisco charges one combined city-and-county transfer tax by price tier, per SF.gov. By local custom the seller pays (see Fidelity National Title's Who Pays What guide), but it moves net proceeds on any exit, so it belongs in your hold-period math.
| Sale price tier | Transfer tax per $1,000 |
|---|---|
| Up to $250,000 | $5.00 |
| $250,000 up to $1 million | $6.80 |
| $1 million to $5 million | $7.50 |
| $5 million to $10 million | $22.50 |
| Above $10 million | Higher tiers apply; see SF.gov |
On a $1 million sale, that works out to $7,500. Separately, every California county charges a documentary transfer tax of $1.10 per $1,000 under Revenue and Taxation Code §11911. Under Proposition 13, a purchase reassesses the property to its price; the tax is 1% plus local voter-approved levies, and assessed value then rises at most 2% a year, per the California Board of Equalization. Expect a supplemental tax bill after closing.
Have a San Francisco rental in mind? Call David's team at (702) 766-3744 with the address and the rent, and we'll tell you how the ratio looks before you make an offer.
| Path | Qualifies mainly on | Fits when | Learn more |
|---|---|---|---|
| DSCR loan | Property rent versus PITIA | The rental should carry itself and you don't want income documents driving approval | This page |
| Conventional investment loan | Your income, debts and documented rental income | Your tax returns show strong, stable income. Fannie Mae's Selling Guide sets how rental income counts and limits on multiple financed properties; cash-out follows its own rules | Fannie Mae reference |
| Bank statement loan | Deposits on business or personal bank statements | You are self-employed and your bank deposits tell the income story better than tax returns; these work at jumbo sizes too | Bank statement loans |
| Jumbo loan | Income, assets and credit at larger balances | Loan amount sits above the conforming limit | Jumbo loans |
| Portfolio loan | Lender-specific guidelines on the whole portfolio | Property or borrower doesn't fit standard boxes | Portfolio loans |
If you plan to add several rentals over time, our serial investor loan page explains how repeat buyers structure their financing, and our investor hub shows every program in one place.
Terms vary by lender and program, and not every option is available on every file, so treat this as a checklist of what to ask rather than an offer. Call (702) 766-3744 and we will compare them on your scenario.
Programs, terms and timing change and are subject to credit, property and underwriting approval. Ask us for current terms on your scenario; we won't quote a one-size figure here. Questions at any step: call (702) 766-3744 and we will walk through it with you.
We lend across Noe Valley (94114), Bernal Heights and the Mission (94110), the Inner and Outer Sunset (94122, 94116), the Richmond (94118, 94121), Pacific Heights and the Marina (94115, 94123), SoMa and Mission Bay (94103, 94107, 94158), the Excelsior (94112) and Glen Park (94131). San Francisco buyers are often tech and finance professionals with RSUs and bonuses; for them the rent-based path can keep a rental purchase separate from a complicated personal income picture. Condo buildings need a project review covering budget, insurance and litigation, and condo HOA dues, special assessments and the building's insurance all feed the PITIA that rent must cover.
Ready to check a deal? Apply online or call (702) 766-3744 to talk through your numbers.
One file from David's own desk, from a Las Vegas purchase in a different market, shows the logic. An investor's builder-preferred lender denied her loan on a new rental. Because she had satisfied the builder's requirement to apply through its lending channel, the builder agreed to honor its incentives if she obtained outside financing. We arranged a DSCR mortgage using the property's rental income instead of a personal debt-to-income calculation, applied the incentives toward a rate buydown, and closed in less than three weeks. The debt service coverage ratio was approximately 1.00. David's takeaway: a lender's denial doesn't necessarily mean a good investment is dead, and getting a loan approved is different from making a good investment. He looks at the whole transaction: cash invested, monthly carrying costs, reserves, prepayment penalties and the exit strategy. Every file differs, and results are not guaranteed.
Company-wide reviews from other markets, shown as written. They are from clients in other markets and are not tied to any one property or loan. More at iQRATE reviews and on our Zillow lender profile.
"Andrei and David were so great! They're helpful and communicated everything with me through the whole process. I am so pleased and look forward to using iqrate for my future investment properties. 10/10 Will be reccomending to friends."
— Kassandra Arthur, Google review (other market, company-wide)
"The team at iQRate Mortgages is experienced, thorough, and professional. They are also very personable and are there to walk you through the process step by step. I highly recommend iQRate Mortgages for a seamless processing of your Mortgage loan. My experience with them was very good. I have also been a client of David's for a couple of decades. I have always had a wonderful customer service experience."
— shawnda urquidi, Google review (other market, company-wide)
"Great professional work! Because of exceptional coordination from Andrei and the team, our escrow was closed seamlessly several days earlier. All our questions and concerns were addressed promptly. My husband and I would highly recommend this team to whoever is looking for a new mortgage or refinancing."
— Oksana Kozlova, Google review (other market, company-wide)
A mortgage for a rental property that qualifies on the property's rent compared with its full monthly payment (PITIA), not on your tax returns, W-2s or debt-to-income ratio. It is business-purpose financing for non-owner-occupied investment property only.
Divide the monthly rent by the monthly PITIA: principal, interest, property taxes, insurance and any HOA dues. For rent-controlled buildings use the current rents, because that is what lenders use.
Yes. Lenders use current, rent-controlled rents rather than market rents for most pre-1979 multi-unit buildings.
San Francisco limits short-term rentals: only a permanent resident can register, and unhosted stays are capped at 90 nights a year. Investment properties can't be short-term rentals, so plan on long-term lease income.
TIC units generally need a fractional TIC loan secured only by your share, and only a few lenders offer them. Whether a rent-based structure fits a particular TIC depends on the lender and the building, so call us before you write an offer.
Condos often fit within the high-balance limit for conventional loans, but the building must pass a project review that covers its budget, insurance and any litigation.
$1,249,125 for a one-unit home, and the FHA limit is the same, per FHFA and HUD.
About $1,875,000 for single-family homes in August 2026, according to the California Association of Realtors.
They can. That is why we compare the penalty choice against your planned hold period before you commit; the penalty can make an early sale or refinance expensive.
The property address, price or value, rent (lease or expected), and your credit, assets and reserves. Apply online or call us and we'll walk through the rest.
No. iQRATE Mortgages is a licensed mortgage broker. We compare wholesale lenders and place the loan; the lender funds it. Verify our licensing on NMLS Consumer Access.
Send us the address and the rent and we will tell you whether the file works before you make an offer. Get started, schedule a consultation, or call (702) 766-3744. Learn more about iQRATE and our San Francisco mortgage broker page. Apply now.
iQRATE Mortgages · Company NMLS 1862492 · David Ghazaryan, Mortgage Broker, NMLS 1486726 · (702) 766-3744 · Licensed in Nevada, California, Texas and Florida. Equal Housing Opportunity. This page is an advertisement for general information, not a commitment to lend. Programs, rates and terms change and are subject to credit, property and underwriting approval; local facts come from the public sources linked above and are not legal or tax advice.
