DSCR Loan on a Vacant Property: How Lenders Count Rent With No Tenant (2026)

"The property is vacant, can I still get a DSCR loan?" is one of the most common questions we field, and the anxiety behind it is understandable. The whole product is built on rent covering the payment. If there is no rent, what is the lender dividing by the payment?

The answer is market rent, as determined by the appraiser, and it has been the standard mechanism in DSCR lending for years. Vacancy at closing is not an exception case; it is the normal state of a purchase, since most sellers deliver a rental vacant or the buyer plans to turn over the tenant anyway. What differs is how much of that market rent each lender will credit, and in which transactions, and that is where investors get surprised. This guide lays out the rules using the same framework as our 2026 requirements guide and DSCR calculation guide, with lender-to-lender variation called out wherever it exists.

How a DSCR Loan Counts Rent When There Is No Tenant

The DSCR ratio is gross monthly rent divided by monthly PITIA (principal, interest, taxes, insurance, and association dues). The lender needs a rent figure for the numerator. There are only three places it can come from:

1. An executed lease with a tenant in place.
2. The appraiser's market rent opinion, delivered as part of the appraisal report.
3. A short-term rental projection (AirDNA) or operating history, for STR programs.

On a vacant long-term rental, option one does not exist, so the appraiser's number carries the file. Every DSCR appraisal on a 1 to 4 unit property includes a rent schedule for exactly this reason:

Form 1007: single-family comparable rent schedule

The Form 1007 is the Fannie Mae addendum where the appraiser pulls three or more comparable rentals near the subject, adjusts them for differences in size, condition, bed and bath count, and amenities, and states an opinion of the subject's market rent. On a single-family DSCR purchase it is arguably the single most important page in the file, because the appraiser's number, not your pro forma, is what the underwriter divides by PITIA. It is ordered automatically with the Form 1004 appraisal on DSCR files; you do not have to request it, but you should confirm the lender ordered it, since a 1004 without the 1007 addendum has to go back to the appraiser.

Form 1025: small residential income property

For duplexes, triplexes, and fourplexes, the Form 1025 replaces the 1004 and 1007 together. It includes a comparable rent schedule for every unit, including the vacant ones. If two units are leased and two are empty, the 1025 gives the underwriter a market rent for the empty units and a benchmark against which the leased units are checked. 1025 appraisals cost more and take longer than single-family reports, so build that into your timeline.

What the appraiser actually does

The rent schedule is not a formula; it is an opinion supported by comps. The appraiser is looking for currently leased or recently leased properties similar to yours, and the quality of that opinion depends on the quality of the comps available and what the appraiser can see about your property. A vacant property that is rent-ready, clean, and photographed well supports a stronger rent opinion than one mid-renovation with a dumpster in the driveway. In our experience, the 1007 kills more DSCR deals than low values do, and most of those were avoidable at the property-prep stage. We cover how to prepare below.

Purchase vs. Refinance: How Much of the Market Rent Lenders Credit

This is the question that matters, and the honest answer is that it varies by lender. The patterns across our wholesale panel:

Three things to take from the table. First, on a purchase, vacancy is essentially a non-issue on standard programs: the 1007 or 1025 rent is used in full. Second, on a refinance, vacancy is where lender guidelines diverge, and the divergence is widest on cash-out, which is 47% of the loans we fund. Third, the "lower of lease and market rent" rule means a tenant in place can hurt as well as help; a below-market lease caps your qualifying rent below what the vacant property would have qualified on.

Why some lenders treat vacant refinances differently

On a purchase, a vacant property is a property about to be leased by a new owner with fresh capital and a plan. On a refinance, a vacant property can mean the same thing (a BRRRR between rehab and lease-up) or it can mean a property that has failed to rent, a tenant who just left under bad circumstances, or an owner who has been carrying an empty unit for months. The lender cannot tell which from the file, so some build in a cushion: an adjustment to the market rent, a lease requirement, extra reserves, or a lower LTV. None of these are universal. The lender your file lands with determines the rule, which is the argument for submitting a vacant cash-out to the lenders on the panel that use the full 1007 rather than hoping.

Worked Example: Vacant Single-Family Purchase

Illustrative only. An investor is buying a vacant single-family rental for $350,000 at 75% LTV, so the loan is $262,500. We assume a 720 to 739 FICO borrower whose base rate at 65% LTV would be 7.25% (inside the 7.00 to 7.75% range for that tier on our rate sheet), plus the +0.250% LTV add for 75%, for an illustrative 7.50% on a 30-year fixed. Property taxes are $350/month and the landlord insurance quote is $125/month; no HOA.

The property is vacant, so there is no lease. The appraiser's Form 1007 comes back at $2,650 market rent. On a standard purchase program that number is used in full:

• DSCR = $2,650 ÷ $2,310.44 = 1.147. The file qualifies comfortably above the 1.0 minimum, lands in the 1.10 to 1.24 pricing tier (+0.125% add on our rate sheet), and would close at 75% LTV with 6 months of reserves ($13,863).

Now the same purchase with a weaker 1007. The appraiser finds fewer comps and comes back at $2,400:

• DSCR = $2,400 ÷ $2,310.44 = 1.039. Still above 1.0, so the loan survives, but it drops into the 1.00 to 1.09 tier (+0.375% add) and is one revised insurance quote away from failing. This is the scenario where a vacant property is "married to the 1007," because there is no lease to point to.

And the hypothetical refinance version: suppose this were a vacant cash-out refinance at a lender that applies a 10% adjustment to vacant market rent (a lender-specific rule, not a market standard). The $2,650 rent becomes $2,385 for qualifying purposes:

• DSCR = $2,385 ÷ $2,310.44 = 1.032. Same property, same appraisal, and the file moved from a 1.15 to a 1.03 purely because of which lender's vacant-refinance rule applied. At a lender that uses the full 1007, it would still be a 1.15.

Fixing a thin vacant-property DSCR

If the 1007 lands at $2,400 and you want margin, two structural moves get the ratio back over 1.10 without a tenant:

• Interest-only. At an illustrative 7.75% (+0.250% for the IO feature), the interest-only payment on $262,500 is $1,695.31, PITIA drops to $2,170.31, and DSCR at $2,400 rent rises to 1.106. See the interest-only guide.
• Drop to 70% LTV. A $245,000 loan at an illustrative 7.375% (one LTV step lower, −0.125%) has a P&I of $1,692.15 and PITIA of $2,167.15, for a DSCR of 1.107 at $2,400. It costs $17,500 more down.

Run your own variations in the DSCR calculator before you go under contract; the right move depends on whether the constraint is cash or rate.

Worked Example: Partially Vacant Fourplex

Multi-unit vacancy works the same way, unit by unit. Illustrative: a $600,000 fourplex at 75% LTV ($450,000 loan) at an illustrative 7.75% (3 to 4 unit properties add 0.125 to 0.250% over SFR on our rate sheet). P&I is $3,223.86; taxes and insurance are $950/month; PITIA is $4,173.86. Two units are leased at $1,300 each; two are vacant. The Form 1025 puts market rent at $1,250 per unit for all four.

• Strict "lower of" treatment: leased units qualify at the lower of $1,300 lease and $1,250 market = $1,250; vacant units at $1,250 market. Total $5,000. DSCR = $5,000 ÷ $4,173.86 = 1.198.
• Lender accepts the leases with proof of receipt: 2 × $1,300 + 2 × $1,250 = $5,100. DSCR = 1.222, which crosses into the 1.10 to 1.24 tier either way but illustrates how documentation of actual rent collection can add a few basis points of ratio.

Note that some programs require minimum occupancy on 3 to 4 unit purchases (for example, at least half the units leased), and the quadplex guide covers the property-type specifics.

Lease-Up Requirements: When a Lender Wants a Tenant Before Closing

Some programs, mostly on refinances, condition the loan on a signed lease before funding. When that condition appears, here is what satisfies it and what does not:

• An executed lease at or near the 1007 market rent, with a start date on or before closing (some lenders accept a start date within 30 days after closing).
• Evidence the lease is real: the security deposit and first month's rent deposited into your account, or a signed move-in checklist. A lease signed yesterday by a relative at twice market rent will be questioned, and most programs will still cap the qualifying rent at the 1007 number anyway.
• Lease at market rent, not below. Because of the "lower of" rule, an under-market lease signed in a hurry to satisfy the condition permanently depresses your qualifying rent. If the 1007 says $2,650 and you lease at $2,300 to fill it fast, the lender uses $2,300.
• What does not satisfy it: a listing, an application, a verbal agreement, or a letter of intent. Underwriters want the executed document.

Timing is the trap. If your hard-money loan matures at month six and the refinance lender's title seasoning is three months, you have a roughly three-month window to finish the rehab, lease the unit, season the deposit, and close. The BRRRR guide walks through sequencing that window, and the seasoning guide covers the 0 to 12 month range of title-seasoning rules across the panel.

Vacant-at-Closing Refinance Rules

Because refinance treatment varies the most, here is the practical checklist for a vacant refinance, in the order an underwriter will think about it:

1. Rate-and-term or cash-out? Rate-and-term refinances of vacant properties are generally treated like purchases (full 1007 rent) on most programs. Cash-out is where overlays cluster, since the lender is handing you money against a property that is not currently producing income.
2. Which rent rule does the lender use? Full 1007 at 100%, an adjusted market rent, or a lease required. Ask before the appraisal is ordered, because the answer determines whether the file works at all.
3. Seasoning. Title seasoning (how long you have owned the property) controls whether the loan is sized on appraised value or cost basis, and it is a separate gate from vacancy. A vacant property at month two of ownership faces both rules at once.
4. Reserves. Cash-out files carry 6 to 12 months of PITIA reserves on most programs. Some lenders add months when the property is vacant, on the theory that reserves exist to carry the payment through exactly this kind of gap. See the reserves guide.
5. LTV. Cash-out caps at 75% LTV on most programs regardless of vacancy. A few lenders reduce vacant cash-out LTV by an additional step; others do not.
6. Condition. A vacant unit mid-renovation appraises as a unit mid-renovation. Most lenders require the property to be habitable and rent-ready at the time of the appraisal; some will not lend on a property with incomplete work, and the appraiser's rent opinion will reflect the condition they see.
7. Why vacant? Be ready to explain. "Rehab just finished and the listing goes live Monday" is a different file from "the last tenant left eight months ago." A short letter of explanation with the listing and showing schedule helps.

The BRRRR Context

Most vacant-refinance questions are BRRRR questions in disguise. The investor bought distressed, rehabbed, and now needs the DSCR refinance to pay off the hard money and return capital. The property is vacant because it was uninhabitable two months ago. Our BRRRR guide covers the full sequence; the vacancy-specific points are:

• Lease up before you close if you can. A signed lease at market rent supports both the DSCR and, indirectly, the appraised value. It also eliminates the lender's vacant-refinance overlay entirely, since the property is no longer vacant.
• If you cannot lease up in time, the file goes to the lenders on the panel that use the full 1007 on vacant cash-outs. There are enough of them that a vacant BRRRR refinance is routine, but it is not every lender.
• Do not under-lease to beat the clock. A below-market lease signed to satisfy a condition caps your qualifying rent for this loan and sets the tenant's expectation for renewals. If the choice is a vacant refinance at a full-1007 lender or an under-market lease at a lease-required lender, the former usually produces the larger loan.
• Document the rehab. Invoices, permits, and before-and-after photos support the appraiser's value and, at lenders that credit improvements toward cost basis, can increase proceeds during the seasoning window.

The Short-Term Rental Path: Vacant by Design

Short-term rentals never have a lease, so STR DSCR programs were built around the vacant-property problem from the start. The qualifying income comes from one of two sources, per our Airbnb DSCR guide:

• An AirDNA Rentalizer projection for the subject address, if the property has no operating history. The lender takes the gross projected annual revenue, divides by 12, and applies a factor (typically 75 to 90%, lender-dependent) to account for vacancy, cleaning, platform fees, and seasonality.
• 12+ months of actual platform statements (Airbnb, VRBO, or property-manager P&L) if the property has been operating. Real history is usually stronger than a projection.

The practical implication for a vacant property: if the long-term 1007 rent does not cover the payment but the STR projection does, the STR program may be the better route, with its own trade-offs (75% LTV typical, 80% on select programs; STR-specific reserves; permit verification before close; a modest rate add on some programs). The reverse is also true. Running both the 1007 and the AirDNA number on a vacant property before choosing a program is standard practice on our desk.

What If the Appraiser's Rent Comes In Low?

On a vacant property this is the central risk, because there is no lease to fall back on. Our low-appraisal guide covers the full playbook; the vacant-specific version, roughly in order of preference:

1. Rebut the rent comps. A reconsideration of value for the 1007 works the same way as for value: two or three specific leased comparables the appraiser did not use, with addresses, lease dates, and rents, and a sentence on why each is more comparable. Factual errors (wrong bed count, missed renovation) are the most effective material. Zillow rent estimates and active listings are not.
2. Sign a lease above the 1007, with proof. Many lenders will qualify on a lease above market rent if you can document receipt. On a vacant property this means actually leasing it, then showing the deposit. It converts the file from "vacant" to "tenant in place" and changes which rule applies.
3. Restructure to interest-only to lower PITIA (worked example above).
4. Lower the LTV. Bring more cash, shrink the payment, raise the ratio.
5. Move to a sub-1.0 or no-ratio program. Sub-1.0 DSCR (0.75 to 0.99) programs exist at 70% LTV with a +0.875% add on our rate sheet; no-ratio programs skip the rent calculation at 65% LTV and 700+ FICO. Both cost more; both close.

Preparing a Vacant Property for the Rent Schedule

The appraiser forms a rent opinion from what they can see and what they can find. On a vacant property you control more of both than you might think:

• Make it rent-ready before the inspection. Finished, clean, utilities on, no debris. A vacant unit full of construction material appraises like one.
• Provide a rent comp packet. Three to five recently leased comparables (not listings) with addresses, rents, dates, and photos. Appraisers are not obligated to use them, but a well-organized packet is frequently reflected in the report.
• List it, if you are ready to. An active listing at a defensible market rent, with showing activity, gives the appraiser a data point and gives a lease-required lender a path.
• Document the improvements. Dated before-and-after photos and a scope-of-work summary, so a freshly renovated kitchen is not compared to tired rentals down the street.
• Confirm the rent schedule was ordered. A 1004 without the 1007 addendum, or a 1025 missing the rent schedule page, is a resubmission and a week lost.

Reserves and Vacancy

Reserves are the lender's answer to the question "what if it stays vacant?" Six months of PITIA is standard on purchases; 9 to 12 months on cash-out, sub-1.0, and other higher-risk categories. On the $350,000 purchase above, six months of the $2,310 PITIA is $13,863 that has to remain in your accounts after closing. The lender does not take it; it verifies it exists. For a vacant property, that cushion is not a formality. Budget for the realistic lease-up period in your market on top of the lender's requirement, and remember that reserves are measured against PITIA, so the same property at a higher LTV or rate needs more.

Frequently Asked Questions

Related Resources

• DSCR Appraisal Came In Low: What to Do
• DSCR Loans for BRRRR
• DSCR Loans for Airbnb and Short-Term Rentals
• DSCR Seasoning Requirements
• DSCR Cash-Out Refinance Guide
• How to Calculate Your DSCR Ratio
• DSCR Loan Reserves Explained
• DSCR Loan Documentation Checklist

DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548), a licensed mortgage broker. Rates and worked examples are illustrative; vacant-property and rent-treatment rules vary by lender and program. Informational only; not a loan commitment. Equal Housing Lender.