San Francisco rents are among the highest in the country, and so are prices. A DSCR loan here works when you size it to the rent the building actually collects, not to the purchase price.
In short: LendingStreet finances San Francisco rentals of 1 to 8 units with DSCR loans that qualify on the property's rent, with no W-2s or tax returns and LLC borrowers welcome. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV, and the standard minimum DSCR is 1.0x with a 620 minimum credit score. In practice, many San Francisco buyers choose lower leverage so the rent clears the payment, and sub-1.0 DSCR programs are available where they fit.
Most investor purchases in the city are not single-family homes. They are two- to four-unit Edwardian and Victorian flats in the Mission, Inner Richmond, Inner Sunset, Bernal Heights and the Excelsior, plus condos in SoMa, Mission Bay and Dogpatch. Single-family homes in the Outer Sunset, Parkside, Visitacion Valley and Bayview round out the picture.
Each type carries a different rent story. A condo or single-family home can usually be re-leased at market rent between tenants. A pre-1979 building of two or more units usually falls under the city's Rent Ordinance, which limits annual increases on existing tenants, so the leases you inherit are the rent you will qualify on.
San Francisco's Rent Ordinance generally covers units in multi-unit buildings that received their first certificate of occupancy before June 1979. State law (Costa-Hawkins) lets the owner set a new rent when a unit turns over voluntarily, but existing tenants keep their regulated rent, and just-cause eviction rules apply broadly. Single-family homes and condos are typically exempt from the increase limits but not from every tenant protection.
For a DSCR loan, that means the rent roll matters more than the listing's pro forma. A long-tenured tenant paying well below market lowers the qualifying rent. Bring the current leases, the Rent Board history if you have it, and any estoppel letters from the seller.
California's Prop 13 resets assessed value to the purchase price when a property sells. The base levy is 1% of assessed value, and voter-approved bonds and special assessments sit on top, so a San Francisco buyer often budgets a bit above 1% of the price for the first full year. The seller's bill, based on an older assessment, can be a fraction of yours.
Expect a supplemental tax bill from the Assessor-Recorder after closing as well. We underwrite on the reassessed figure, so use that number in your own analysis.
This example is illustrative and not a quote. An investor buys a two-unit building in the Excelsior for $1,250,000. The upper flat rents for $3,400 and the lower for $3,100, so combined rent is $6,500 a month. Estimated taxes on the new assessed value are $1,250 a month and insurance is $260.
At 75% LTV the ratio is 0.84x, well below the 1.0x standard minimum. At 65% it improves to 0.94x. At 55% LTV, with a loan of $687,500, the ratio reaches 1.07x and the file fits a standard program. The difference between the first and last columns is the larger down payment, not a different rent.
| Item | 75% LTV | 65% LTV | 55% LTV |
|---|---|---|---|
| Loan amount | $937,500 | $812,500 | $687,500 |
| Estimated principal and interest | $6,237 | $5,406 | $4,574 |
| Taxes and insurance | $1,510 | $1,510 | $1,510 |
| Total monthly payment | $7,747 | $6,916 | $6,084 |
| DSCR at $6,500 rent | 0.84x | 0.94x | 1.07x |
Gross rent in the city is high in dollars but low relative to price, so the purchase-money ceiling of 80% LTV is rarely where a San Francisco file lands. Many investors put 35% to 45% down, or pair a smaller down payment with a sub-1.0 DSCR program and more reserves.
We run the numbers at several loan amounts before you write an offer, so you know what the building supports and how much cash to bring.
San Francisco only allows stays under 30 days when the host is a permanent resident who lives in the unit most of the year and registers with the Office of Short-Term Rentals. A non-owner-occupied investment property cannot legally run as a nightly rental, so we underwrite San Francisco properties on long-term leases.
If short-term rental income is your goal, look at California markets that issue permits to non-resident owners, and check that city or county's current rules before you buy. Our STR page explains how projected revenue is used where it is allowed.
Much of the city's rental stock is wood-frame and a century old. Lenders and insurers look at the roof, electrical, plumbing and foundation, and many buyers price earthquake coverage separately. Larger wood-frame buildings may have completed the city's mandatory soft-story retrofit, and the permit record helps.
Send the address, price, current rent roll and the leverage you have in mind. The financing team will size the loan on the actual leases, show the ratio at two or three loan amounts, and flag any rent-control or permit questions before you commit. Use the form below or call (877) 298-1001.
For statewide guidance on DSCR terms, see our California DSCR page.
Yes. LLC borrowers are standard on our DSCR loans, and you sign for the loan personally. Our investor loans are business-purpose loans on non-owner-occupied property.
Usually not while the existing tenant stays. We generally use the in-place lease. Vacant units can be supported with a market rent estimate from the appraisal.
Prices are high relative to rents, and the tax bill resets to your price under Prop 13. Lower leverage or a sub-1.0 DSCR program usually solves it.
Our DSCR programs start at $150,000 with no stated maximum. Larger balances get more review, and maximum LTV can be lower; it varies by program.
Generally no. Rent from a unit without proper permits is unlikely to be counted, and it can affect value. Legalizing it first is often worth the time.
We lend on condos that meet program requirements. Tenancy-in-common interests are a specialized case; ask us before you go under contract.
Timing depends mostly on the appraisal, title and insurance. A complete file with leases and a signed contract moves fastest.
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