Michigan DSCR FAQ
Michigan DSCR loan questions, answered
Quick answer
DSCR loans qualify Michigan rentals on rent versus the full payment, not on personal income. They are for business-purpose, non-owner-occupied property only. The answers below cover the ratio, uncapped taxes, LLCs, short-term rentals, Detroit compliance and how we work as a broker.
Can I get a DSCR loan on a Michigan rental?
Yes, for business-purpose, non-owner-occupied investment property. Wholesale DSCR programs cover Michigan single-family homes, 2-4 unit buildings, many condos and, through small-balance programs, 5-10 unit buildings. Each lender sets its own credit, reserve and equity requirements, and the rent-to-payment ratio and the property have to work. Loan Daddy LLC is a broker, not a lender.
What DSCR do I need?
It depends on the lender. Many programs look for a ratio at or above 1.00, and stronger ratios generally open more options. Some programs accept lower ratios with more equity and reserves. Test your numbers in the DSCR calculator.
Why might my Michigan property tax go up after I buy a rental?
A transfer of ownership generally uncaps the taxable value the following year and resets it toward the state equalized value. A rental also cannot claim the Principal Residence Exemption, so it pays school operating millage that owner-occupants are exempt from. Underwrite the uncapped, non-homestead tax. See our uncapping guide.
What are Michigan DSCR loan requirements?
Expect lender-set credit, reserve and equity minimums, an appraisal with a rent schedule, a lease or market rent, insurance quotes and entity documents if you buy in an LLC. Personal tax returns and W-2s generally are not used to qualify. For Detroit rentals, have the Certificate of Compliance status ready. More in Michigan DSCR loan requirements.
Does a Detroit rental need a Certificate of Compliance?
Detroit requires landlords to register each rental with the city’s buildings department and pass an inspection to get a Certificate of Compliance. Registration alone does not make a property compliant, and non-compliant properties can face tickets and enforcement. See the Detroit compliance guide.
Can I use short-term rental income to qualify?
Sometimes. It depends on local rules and the lender’s program. Grand Rapids limits short-term lodging to owner-occupied homes, Ann Arbor allows non-owner-occupied STRs only in mixed-use districts, and lake and resort towns set their own rules. Lenders generally count STR income only where the use is lawful. See short-term rental DSCR.
Can I get a DSCR loan in an LLC?
Usually yes, with personal guarantees from the members and the entity documents in order. See buying Michigan rentals in an LLC.
Can I live in the property?
No. Loans arranged on this site are for business-purpose, non-owner-occupied investment property only, so no primary homes, no second homes and no lake cottages for family use. You will sign occupancy and business-purpose statements.
Do you publish Michigan DSCR pricing?
No. Wholesale lenders price each Michigan file on credit, leverage, ratio, property type, loan size and the market that day, so we do not advertise pricing. Send a scenario and we will show the options that fit. Compare total costs, including lender fees and title, not one headline number.
Is Loan Daddy a Michigan lender?
No. Loan Daddy LLC (NMLS #2827624) is a mortgage broker, not a lender. Michigan DSCR loans are arranged with wholesale lenders, who underwrite and fund them.
Is there a minimum loan amount for cheap Detroit or Flint houses?
Many DSCR programs set a minimum loan amount, which can rule out very low-priced homes or narrow the options. Tell us the price up front, or consider a portfolio DSCR loan that combines several properties.
Can I get a DSCR loan on a lake cabin up north?
Only if it is a business-purpose rental you will not use personally, the local rules allow short-term rentals and the lender’s program accepts that property type and STR income. See Northern Michigan rentals.
Can I refinance a rehabbed Michigan rental into a DSCR loan?
Often yes, once it is rented or rent-ready and it meets the lender’s seasoning rules for using the new appraised value. See BRRRR in Michigan.
Can I pull cash out of a Michigan rental with a DSCR loan?
Yes, through a cash-out DSCR refinance, subject to the lender’s seasoning and leverage rules. Proceeds must be used for business purposes.
Have a Michigan rental in mind?
Send the address, the rent and the uncapped tax estimate. We shop the scenario with wholesale lenders and come back with options that fit the property.