DSCR Loans in New York City for Rental Investors

A DSCR loan compares the property's rent to its monthly payment, including taxes, insurance and any common charges. If the rent covers the payment by enough, the property can qualify without W2s or tax returns.

In New York I work only with investment properties held in an LLC or corporation. A personal guarantee from the owners is normal. That usually means one to four family homes and warrantable condo units. I don't finance co-ops, owner occupied homes, or mobile and manufactured homes, and I don't arrange loans to individuals in their own name.

Yes. A DSCR loan usually requires a full appraisal, including a market rent opinion. The appraiser values the property and estimates what it would rent for, and that rent figure is often what the loan is sized on. In New York City that rent opinion matters even more, because a stabilized unit can't be raised to market just because the appraiser thinks it could rent for more.

Brooklyn investors tend to look at two and three family brownstones and frame houses in Bed Stuy, Bushwick and Crown Heights. In Queens it is often two families in Astoria, Ridgewood and Jackson Heights, where a lot of buyers rent out both units. Bronx buyers look at small multifamily buildings near the 4 and 6 lines, and Staten Island is mostly one and two family homes with driveways and yards that rent to families. I'll look at actual rents on your block before I quote anything, because two streets apart can mean very different numbers.

If a building has rent stabilized units, I underwrite those units on their legal regulated rent rather than on market rent. Since the 2019 rent law, stabilized units can no longer be deregulated when they turn over, and increases follow the Rent Guidelines Board. For leases starting between October 2025 and September 2026, that was 3% for a one year lease and 4.5% for a two year lease. Improvement increases still exist but are capped and spread over many years, so I don't count on them to make a deal work.

You generally can't qualify on Airbnb income here. Local Law 18 bars renting an entire apartment or home for less than 30 days, and only a host who lives in the unit can register. Platforms can't book unregistered rentals, so I size New York City loans on leases of 30 days or longer.

Many small investors are exempt from Good Cause Eviction. The law doesn't apply to an owner with 10 or fewer units anywhere in New York State, to condo and co-op units, to buildings with a certificate of occupancy from 2009 or later, or to rent stabilized units, which are already regulated. If you buy through an LLC, every individual owner has to stay at 10 units or fewer for the small landlord exemption to hold, so it is worth counting before you close.

Closing a rental in the city costs more than most investors expect, and it is worth knowing the pieces before you make an offer.

Mortgage recording tax. On a one to three family home or a condo unit, the combined city and state tax is 2.05% of the loan under $500,000 and 2.175% at $500,000 or more. On a four unit building or larger, it rises to 2.8% once the loan reaches $500,000. On 1 to 6 family homes, 0.25% of the recording tax is a special additional tax on the lender, and state law (NY Tax Law §253(1-a)(a)) says it can't be passed to the borrower, directly or indirectly.

City transfer tax. On a one to three family or a condo unit it is 1% up to $500,000 and 1.425% above that. On a four unit building it is 1.425% up to $500,000 and 2.625% above.

State transfer tax. The seller usually pays 0.4%, with a higher rate on larger sales.

Mansion tax. Buyers pay 1% on a one to three family home or condo unit at $1 million or more. A four unit building is not residential for this tax, so it doesn't apply.

Buildings of up to three units are generally property tax Class 1 in New York City, and four to six unit rentals are Class 2a. Class 1 is assessed at 6% of market value and Class 2 at 45%, with different caps on yearly increases, so the tax bill on a four family can look very different from a three family next door. The fourth unit also moves you into the higher transfer tax and recording tax rates above. I run both versions for investors deciding between the two.

A condo is the better fit for a DSCR loan. A condo is deeded real estate, while a co-op is shares in a corporation, and co-op boards often limit subletting. Most DSCR programs, including mine, don't finance co-ops at all. Condo approval depends on the building, so send me the address early.

The best DSCR lender for a city rental is one that actually lends in New York, understands stabilized rent and accepts your entity. Ask whether they finance four unit buildings, how they treat regulated rent, and whether they will close in your LLC. As a broker, I'll tell you plainly whether your deal fits and what it takes to close. Not everyone will qualify.

Send me the address, the rent roll and how you plan to hold it, and I'll tell you what I think the numbers support. You reach me directly, not a call center.