DC rents are high, but so are prices, condo fees and the rules around renting. The right DSCR lender here is one that can work with tight ratios and the District's mix of rowhouses and condo buildings.
In short: The best DSCR lender in Washington, DC is the one whose program fits your property type and ratio, because high prices make DC ratios tighter than in most cities. Compare rate, max LTV, minimum DSCR, condo project rules and whether sub-1.0 options exist. LendingStreet finances investment property in DC with rates from 6.125% for well-qualified borrowers, up to 80% LTV on purchases, and sub-1.0 and no-ratio programs. Plan on a larger down payment for many condos and rowhouses so the rent covers the payment.
Visio Lending, LendingOne, Angel Oak, CoreVest and Lima One also write DSCR loans, alongside local banks that lend to investors on personal income. Each has its own rules for condos, minimum ratios and property types.
In DC, the condo and ratio rules usually decide the outcome more than a small difference in rate. A lender that declines your building or will not go below 1.0x is not a fit for that deal, however good its headline rate.
We offer DSCR rental loans that qualify on the property's rent. Rates start at 6.125% for well-qualified borrowers, purchases go up to 80% LTV and cash-out refinances up to 75%. The minimum credit score is 620.
LLC borrowers are allowed and no W-2s or tax returns are required. The standard minimum is 1.0x, and our sub-1.0 and no-ratio programs give DC investors room when rent does not quite cover the full payment.
Rowhouses dominate neighborhoods like Capitol Hill, Petworth, Columbia Heights, Bloomingdale and Brookland. Many have English basement units, and a legal two-unit rowhouse can rent both levels separately. Navy Yard, NoMa and the Wharf are newer condo and apartment areas.
East of the Anacostia River, in neighborhoods such as Congress Heights and Anacostia, prices are lower and long-term rentals are the norm. Tenant demand across the city comes from federal agencies, contractors, universities and hospitals.
DC requires a rental business license for most rental units, and older buildings may fall under the District's rent stabilization law unless an exemption applies. DC also has a tenant opportunity to purchase law that gives tenants rights when certain properties are sold. Confirm how these apply with a DC real estate attorney before you buy an occupied building.
DC's short-term rental law generally limits short-term rentals to a host's primary residence, so most investor STR plans do not work here. Many owners rent furnished units for 30 days or more to traveling professionals instead; see our mid-term rental guide for how lenders treat that income.
This example is illustrative and not a quote. An investor buys a one-bedroom condo for $485,000 that rents for $2,900 a month. The condo fee is $520 and taxes and insurance are $350, so $870 a month goes to costs besides the loan.
At 75% LTV the loan is $363,750. At a sample rate of 7.25% on 30-year amortization, principal and interest is about $2,481, the payment is about $3,351 and DSCR is about 0.87x. At 60% LTV the loan is $291,000, principal and interest is about $1,985, the payment is about $2,855 and DSCR is about 1.02x. A sub-1.0 program could be the middle path.
| Item | 75% LTV | 60% LTV |
|---|---|---|
| Loan amount | $363,750 | $291,000 |
| Principal and interest | About $2,481 | About $1,985 |
| Condo fee, taxes and insurance | $870 | $870 |
| Total monthly payment | About $3,351 | About $2,855 |
| DSCR at $2,900 rent | About 0.87x | About 1.02x |
DSCR lenders review the condo association as well as the unit. Common issues are low reserves, pending litigation, a high share of units owned by one entity and commercial space in the building. Co-ops are a different ownership structure and are outside many DSCR programs.
Ask the management company for the condo questionnaire and budget early. A building that fails review can sink a deal late, after you have paid for an appraisal.
Gather the lease or market rent estimate, the condo questionnaire and budget if applicable, an insurance quote, your rental license status, LLC documents and two months of bank statements. For a two-unit rowhouse, include proof the basement unit is legal.
Send the numbers before you make an offer. We can show the LTV that clears 1.0x and whether a sub-1.0 program fits.
Yes. LendingStreet finances investment property in the District of Columbia, including rowhouses, two-unit properties and eligible condos. Loans are business-purpose on non-owner-occupied property, starting at $150,000.
Usually not as a pure investor STR. DC generally limits short-term rentals to a host's primary residence, and we finance investment property only. Furnished rentals of 30 days or more are a common alternative.
Prices and condo fees are high relative to rent. Many DC properties need a lower LTV, or a sub-1.0 program, for the rent to cover the full payment.
Yes, if both units are legal. The rent from both counts toward the ratio. A basement without proper permits is usually counted as part of a single-family home.
Co-ops are outside many DSCR programs because you own shares, not real property. Condos and fee simple rowhouses have far more options.
No. The loan qualifies on the property's rent. You need a 620 or higher credit score, reserves and entity documents if you borrow through an LLC.
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