The complete qualification matrix for DSCR financing on co-living / padsplit properties — including FICO tiers, LTV limits, down payment requirements, and documentation standards. No income documentation required.
These figures reflect the aggregated program parameters across our 13+ lender network for co-living / padsplit DSCR financing. Individual lenders may vary on secondary criteria, but these represent the available range.
This is the single most important aspect of co-living / padsplit DSCR underwriting to understand — and the area where most loan officers outside this niche get it wrong.
Market rent from Form 1007 is the qualifying income basis. Form 1007 — the Single-Family Comparable Rent Schedule — is completed by the same licensed appraiser who appraises the property. The appraiser identifies 2–3 comparable rentals in the surrounding market and derives an estimated market rent for the subject property. This figure — not actual collected rent, not niche-specific income — is what DSCR underwriting uses.
Why market rent instead of actual income? Because market rent provides an objective, appraiser-verified figure that is independent of occupancy fluctuations, management arrangements, and the specific use of the property. It makes co-living / padsplit properties underwritable on the same standard as any residential rental.
Asset depletion as a supplement. If market rent on Form 1007 doesn't fully support debt service, asset depletion is a structuring option. Under asset depletion methodology, a portion of your verified liquid assets (bank accounts, investment accounts) is converted into an imputed monthly income figure that supplements the DSCR analysis. This is not available on all programs but is a meaningful alternative for investors with substantial liquidity.
What is not qualifying income: W-2 wages, self-employment income, tax return profits, niche-specific income streams, platform income, or any other personal income source. These are not part of the DSCR underwriting equation.
Several common investor profiles that struggle with conventional lending qualify comfortably for DSCR co-living / padsplit financing:
No. DSCR loans qualify based on market rent as determined by a licensed appraiser using Form 1007 — the whole-unit comparable rent standard. Per-room or platform-specific income isn't the qualifying basis, though the premium that co-living generates is part of what makes these properties attractive as investments.
Yes. DSCR loans fully support LLC and corporate entity ownership. Many co-living investors hold properties in entities for liability reasons, and this is not an obstacle to DSCR qualification.
The minimum FICO is 600. At 720+ FICO you qualify for the best LTV programs — up to 85% on purchase and rate-term refinance, with 15% down. Borrowers at 640 and above qualify at 75% LTV (25% down). The 600 floor qualifies at 60% LTV (40% down).
Sub-1.0 DSCR doesn't disqualify your property. Our lender network includes 376 sub-1.0 DSCR programs and 184 no-ratio programs. The right pathway depends on your credit profile, down payment, and property specifics.
Programs are available in 47 states. New York is excluded from this network.
Quick Answers
DSCR = market rent (Form 1007) ÷ monthly debt service. The appraiser determines market rent for the property — not per-room PadSplit rates. Per-room income creates a 2-2.5x premium over market rent (your return on investment), but underwriting is based on Form 1007 market rent. No-ratio programs available for tight-margin markets.
Minimum 600 FICO. At 720+: 15% down, 85% LTV. At 640: 25-30% down. At 600: 40% down. Cash-out capped at 80% LTV. No-ratio programs available. Property must be residential — not a large commercial shared-living operation.
Most conventional lenders don't understand co-living and PadSplit properties — they either misclassify them as commercial or can't underwrite the per-room income model. DSCR lenders specializing in co-living use Form 1007 market rent, which works cleanly for these properties. The per-room premium is your investment upside; Form 1007 is your underwriting basis.