DSCR Loan Documentation Checklist: Everything You Need

DSCR loans require significantly less documentation than conventional mortgages—no tax returns, no W-2s, no employer verification letters. But what they do require must be complete, accurate, and current.

Missing pages, outdated statements, or incomplete documentation are the top causes of delayed closings. This comprehensive checklist covers everything you'll need to provide, how to prepare it, and common mistakes to avoid.

Core Documents: Required for All DSCR Loans

Bank Statements (Last 2 Months)

What you need: Complete statements for all checking and savings accounts

Requirements:

• All pages, even blank ones
• Both sides of pages if statements are double-sided
• Must show account number, your name, and bank name on every page
• Must be dated within 60 days of loan application
• Statements must be consecutive months (if applying in March, need January and February)

Acceptable formats:

• Original mailed statements (scan all pages)
• Downloaded PDF statements from online banking
• Bank-generated printouts on bank letterhead

Not acceptable:

• Screenshots of account balances
• Single-page summaries
• Redacted statements with information blacked out
• Excel spreadsheets or self-created summaries

How many accounts:

• All accounts showing any balance on credit report
• All accounts you're using to document down payment or reserves
• At minimum, enough accounts to show down payment source and reserve requirements

Common mistakes:

• Providing only page 1 of 4-page statements
• Statements from 3-4 months ago (too old)
• Non-consecutive months (January and March but not February)
• Blacking out transactions for privacy (lenders need to see everything)

Large deposits: Any single deposit over $500-$1,000 requires documentation

• Transfers from another account: Show both accounts
• Paycheck: Provide paystub
• Gift: Provide gift letter and donor's proof of funds
• Tax refund: Provide tax return and refund notice
• Sale proceeds: Provide settlement statement or bill of sale

Investment Account Statements (Last 2 Months)

What you need: If using stocks, bonds, mutual funds, or other investments for reserves

Requirements:

• Complete statements showing all holdings
• Account number and your name visible
• Current value clearly stated
• Same 2-month consecutive timeframe as bank statements

Lender calculations:

• 70% of current value counts toward reserves
• Example: $100,000 in stocks = $70,000 usable for reserves

Types that count:

• Individual brokerage accounts
• Joint investment accounts
• Money market funds
• Certificates of deposit (CDs)

Types that need special handling:

• Retirement accounts (401k, IRA): Usually count at 60-70% and may need vested balance confirmation
• Restricted stock: May not count due to selling restrictions
• Cryptocurrency: Most lenders don't count crypto as reserves

Retirement Account Statements (Last 2 Months)

What you need: If using retirement funds for reserves

Requirements:

• Complete statement showing current balance
• Vested amount clearly stated (if employer plan)
• Account owner name and account number

Lender calculations:

• 60-70% of vested balance counts
• Example: $150,000 in 401(k), 100% vested = $90,000-$105,000 toward reserves

Withdrawal considerations:

• Lenders don't require you to withdraw funds
• They verify funds exist as reserve cushion
• Early withdrawal penalties don't affect the calculation

Common retirement accounts:

• 401(k) and 403(b)
• Traditional and Roth IRAs
• SEP IRAs
• Pension statements

Credit Authorization Form

What you need: Signed form authorizing lender to pull credit

Requirements:

• Your legal name exactly as it appears on government ID
• Current address and previous addresses (2 years)
• Social Security Number
• Date of birth
• Signature and date

What lenders pull:

• Tri-merge credit report (all three bureaus: Experian, Equifax, TransUnion)
• Includes credit score, payment history, outstanding accounts, inquiries

Credit inquiry impact:

• FICO treats multiple mortgage inquiries within 45 days as single inquiry
• Shop all lenders within 30-45 days to minimize score impact

Government-Issued Photo ID

What you need: Valid driver's license, passport, or state ID

Requirements:

• Not expired
• Clear, legible copy (both front and back of driver's license)
• Name matches application exactly
• Address doesn't need to match (but significant discrepancies may require explanation)

Co-borrowers: Each borrower provides separate ID

Purchase Contract (For Purchases)

What you need: Fully executed purchase agreement

Requirements:

• Signed by all parties (buyer, seller, agents)
• All pages included, including addendums
• Property address matches loan application
• Purchase price matches loan application
• Closing date specified

Important contract elements:

• Financing contingency with specific loan terms
• Appraisal contingency (protects you if appraisal comes in low)
• Inspection contingency
• Earnest money deposit amount and proof of deposit

Amendments and addendums:

• Provide all changes to the original contract
• Initialed and signed by all parties
• Dated

Property-Specific Documents

For Properties You're Purchasing

Seller's disclosure: Property condition disclosure (if provided by seller) Inspection report: Home inspection report (if you ordered one) Rental comparables: Research showing market rent for the property Current lease: If property is tenant-occupied Recent improvements: Receipts for major improvements in last 12 months

For Properties You Own (Refinance)

Current mortgage statement: Showing principal balance, interest rate, monthly payment

Property tax bill: Most recent annual tax bill or assessment

Homeowner's insurance declaration page: Current policy showing coverage amount

Current lease: If property is rented

• Signed by tenant
• Shows monthly rent, security deposit, lease term
• Dated within current year for annual leases

Schedule E (optional but helpful): Shows rental income and expenses for the property

• Not required (this is the key DSCR advantage)
• Can help if rental income changed significantly

Mortgage payment history: Some lenders request 12 months canceled checks or bank statements showing on-time payments

For Other Investment Properties You Own

Property list: Addresses and mortgage information for all owned rental properties

Mortgage statements: Current statements for each property

Lease agreements: Current leases showing rental income

Why lenders need this:

• Verify you have reserves for all properties
• Assess your experience level as investor
• Calculate total debt obligations

Property Insurance Documents

Homeowner's/Landlord Insurance Quote or Policy

What you need: Declaration page showing coverage

Requirements:

• Property address matches loan application
• Coverage amount meets or exceeds loan amount
• Lender named as loss payee/mortgagee
• Effective date at or before closing
• Premium amount specified

Coverage types:

• Landlord/rental dwelling policy (not homeowner's policy)
• Replacement cost coverage (not actual cash value)
• Liability coverage

Special requirements:

• Flood insurance if property in flood zone (FEMA determination)
• Windstorm insurance if in coastal area
• Earthquake insurance if in high-risk zone (California, Pacific Northwest)

Common mistakes:

• Submitting homeowner's policy instead of landlord policy
• Coverage amount below loan amount
• Lender not listed as loss payee
• Quote instead of bound policy at closing time

Flood Certification

What you need: FEMA flood zone determination

Requirements:

• Lender usually orders this
• Cost: $15-$25
• Determines if property is in Special Flood Hazard Area (SFHA)

If property is in flood zone:

• Flood insurance is required
• Cost varies dramatically ($400-$3,000+ annually)
• May make deal uneconomical

Not in flood zone: No flood insurance required (but may still be good idea)

For Condos and Townhomes

HOA Documents Package

What you need: Association documents and financial information

Requirements:

• Master insurance policy (showing coverage)
• Budget (current year)
• Reserve study
• CC&Rs (Covenants, Conditions, and Restrictions)
• Bylaws
• Articles of incorporation
• Meeting minutes (last 6-12 months)
• Delinquency report (percentage of owners behind on dues)

Why lenders require this:

• Assess financial health of HOA
• Verify adequate reserves for major repairs
• Confirm insurance coverage is sufficient
• Check for pending litigation or special assessments

Warrantable vs non-warrantable:

• Warrantable: Meets Fannie Mae guidelines (easier financing)
• Non-warrantable: Doesn't meet guidelines (higher rates, stricter terms)

Red flags lenders look for:

• HOA delinquency rate above 15%
• Reserves below 10% of annual budget
• Pending litigation
• Single entity owns more than 20% of units
• More than 30% of units are rentals

Who orders: Usually title company or escrow officer Cost: $200-$500 (varies by HOA) Timeline: 10-30 days (some HOAs are very slow)

Common mistakes:

• Waiting until lender requests instead of ordering at contract acceptance
• Incomplete package missing key documents
• Outdated documents (older than 90 days)

HOA Approval Letter

What you need: Written approval from HOA for you to purchase and rent the unit

Requirements:

• On HOA letterhead
• Confirms you're approved as owner
• Confirms property can be rented (if HOA has rental restrictions)
• Signed by HOA board member or management company

Rental restrictions to check:

• Minimum ownership period before renting (6 months, 1 year, etc.)
• Maximum percentage of rental units allowed in complex
• Approval process for tenants

Title and Legal Documents

Title Commitment/Report

What you need: Preliminary title report or commitment

Who orders: Title company (ordered by lender or buyer)

What it shows:

• Current owner of record
• Outstanding liens (mortgages, HELOCs, tax liens, judgment liens)
• Easements and restrictions
• Required payoffs at closing

Review carefully:

• Verify seller is listed as owner
• Check for unexpected liens
• Review easements (utility, access, etc.)
• Confirm legal description matches property

Common title issues:

• Unreleased prior mortgages (shows as lien even though paid off)
• Contractor liens for unpaid work
• Tax liens
• Judgment liens against previous owners
• Estate issues requiring probate

Resolution: Title company works with seller and attorneys to clear issues before closing

Survey (If Required)

What you need: Property boundary survey by licensed surveyor

Requirements:

• Licensed surveyor
• Shows property boundaries, structures, easements
• Dated within acceptable timeframe (some lenders accept surveys within 5-10 years)
• Complies with lender requirements

Cost: $400-$800

When required:

• Lender policy (many DSCR lenders require surveys)
• Title company requirement
• Property in rural area or large lot
• Potential boundary disputes

When you can skip:

• Recent survey exists (within 5-10 years) AND
• Title company will insure against survey defects without new survey

Proof of Down Payment and Closing Costs

Wire Transfer or Cashier's Check Confirmation

What you need: Proof you have funds ready to wire

Timing: Provided 2-3 days before closing

Requirements:

• Wire transfer confirmation from your bank
• Cashier's check from bank (not personal check)
• Amount matches closing disclosure

Wire fraud warning:

• Verify wire instructions by phone with title company
• Don't trust emailed instructions without calling to confirm
• Use phone number from title company website, not from email
• Wire fraud is rampant in real estate

Additional Documents (As Needed)

Gift Letter (If Receiving Gift Funds)

What you need: If someone is gifting you money for down payment

Requirements:

• Letter stating amount, donor relationship, property address
• Statement that gift doesn't need to be repaid
• Donor's bank statement showing withdrawal
• Your bank statement showing deposit
• Both signed and dated

Acceptable donors:

• Family members (parents, siblings, grandparents)
• Domestic partners
• Employers (with restrictions)

Not acceptable:

• Loans disguised as gifts
• Interested parties to the transaction (sellers, real estate agents)

Credit Explanation Letters

What you need: Explanation for negative credit items

When required:

• Late payments in last 12 months
• Collections or charge-offs
• Recent credit inquiries
• Credit score discrepancy between bureaus

Format:

• Brief written explanation (2-4 sentences)
• State what happened, why it happened, how it's resolved
• Sign and date

Example: "30-day late payment on 6/2025 mortgage: I was traveling internationally and missed the due date. I paid immediately upon return and have set up autopay to prevent future occurrences."

Organizational Documents (For LLC or Trust Ownership)

What you need: If taking title in business name

For LLCs:

• Articles of Organization
• Operating Agreement
• Certificate of Good Standing
• EIN letter from IRS
• Resolution authorizing loan and identifying authorized signers

For Trusts:

• Complete trust document OR certificate of trust
• Certification that trust is valid and in effect
• Identification of trustee(s)
• Trustee authority to borrow

Why lenders need this: Verify the entity exists, confirm who can sign loan documents, assess entity structure

Document Preparation Best Practices

Organize Before You Submit

Create a folder structure:

• Bank Statements
• Investment Accounts
• Property Documents
• Insurance
• Other

Label files clearly: "BankOfAmerica_Checking_Jan2026.pdf"

Submit Everything at Once

Better: All documents in one organized package Worse: Trickling in documents over 2 weeks

One complete submission = faster processing

Provide All Pages

Missing pages are the #1 cause of re-requests

Check:

• Bank statement shows "Page 1 of 4"—submit all 4 pages
• Include even blank pages
• Both sides if statements are double-sided

Don't Redact Information

Privacy concerns are understandable, but lenders need complete information:

Don't black out:

• Transaction descriptions
• Account numbers
• Small transactions

Lenders look for:

• Large deposits needing explanation
• NSF or overdraft fees (signal financial stress)
• Other mortgage payments (to calculate total PITIA for reserves)

Use PDF Format

Best: Clean PDF files from online banking or scanned originals Acceptable: Clear photos if PDFs unavailable Worst: Faxed documents, photocopies of photocopies, unclear images

Update Old Documents Proactively

If document is dated more than 30 days before closing:

• Expect to provide updated version
• Submit updated version proactively
• Saves time versus waiting for lender to request

Common items needing updates:

• Bank statements (must be within 30-60 days)
• Insurance quotes (must be within 30-60 days)
• Credit report (over 90 days old requires re-pull)

Documents You DON'T Need (DSCR Advantage)

Personal tax returns: Not required unless you own more than 25% of a business and are using business income

W-2s or 1099s: No income verification needed

Pay stubs: Not required

Employment verification letters: Not required

Personal income: Irrelevant to qualification (unless using for rental income on another property)

Personal financial statements: Not required

Business tax returns: Not required (unless using business assets for reserves)

This is the major DSCR advantage—qualifying without personal income documentation.

Common Documentation Mistakes That Delay Closing

1. Incomplete statements: Providing page 1 of 3 instead of all pages
2. Old statements: Bank statements from 3 months ago
3. Unexplained large deposits: $5,000 deposit with no documentation
4. Non-consecutive months: January and March statements but no February
5. Wrong property address: Application shows 123 Main St but contract shows 125 Main St
6. Mismatched names: Application says "Robert Smith" but bank statement shows "Bob Smith"
7. Altered documents: White-out, changing dates, redactions
8. Wrong insurance type: Homeowner's policy instead of landlord policy
9. Unsigned forms: Credit authorization not signed
10. Missing addendums: Purchase contract addendum not included

Each mistake adds 2-5 days to your timeline while lender requests corrections.

Bottom Line

DSCR loan documentation is simpler than conventional mortgages but must be complete, accurate, and current. The core requirements are bank statements, credit authorization, property documents, and insurance information.

Organize everything before applying. Submit complete documents (all pages, no redactions) upfront. Use PDF format. Update documents proactively when they age beyond 30 days.

The difference between a 21-day closing and a 45-day closing often comes down to documentation completeness. Borrowers who submit everything at once with all pages included close faster and with less stress than those who provide documents piecemeal over weeks.

Print this checklist, gather everything before applying, and you'll be prepared for a smooth, efficient DSCR loan process.