You own four properties. All four are rented. All four are making money. The fifth one just got declined.
Not because the deal is bad. Because your debt-to-income ratio counts every mortgage you carry at full weight and gives you partial credit at best for the rent that pays them. The better you get at this, the harder conventional financing makes it to continue. That is not a bug in your file. It is what happens when a consumer lending formula is pointed at a business.
A DSCR loan qualifies the property, not you. No personal income, no tax returns, no debt-to-income ratio at all. The lender divides the property's gross rent by its payment, and that single number decides whether the file works.
The calculation, from CMG Financial's Non-QM Sharp Series guidelines (NMLS #1820, revised 09/21/2026), is exactly this: DSCR = Gross Rental Income / PITIA, or Gross Rental Income / ITIA on an interest-only loan. DSCR loans are qualified at the original note rate.
What coverage you actually need
On the Sharp DSCR program, coverage is eligible at 0.75x. That is worth sitting with. It means a property whose rent covers only three quarters of its full payment can still be financed, because the program is built for professional investors who are not relying on that property to carry itself from month one.
No-ratio DSCR is also acceptable with restrictions on that program, meaning the coverage test itself is set aside under defined conditions.
That does not make a 0.75x property a good idea. It makes it financeable. Those are different questions, and the second one is yours.
How gross rent gets determined
This is where files move. Gross income is calculated using the lower of:
- the executed lease agreement, or
- market rent from the appraisal.
If your executed lease shows more than the appraiser's market rent, you can use the lease figure, but only with sufficient evidence of receipt, and the guidelines want the three most recent consecutive months.
So a property rented above market to a good tenant does not automatically qualify on that higher number. You have to prove the money actually arrives.
Vacant properties are not eligible for refinance, with one exception: a property currently vacant because it has just been renovated or rehabbed and is intended to be rented soon. That requires the appraiser to confirm the recent work with visual evidence, and then the 1007 market rent schedule can be used.
Who qualifies as the borrower
The Sharp DSCR program is written for professional investors with a clean derogatory housing event history of 36 months or more and a mortgage history of 0x30x12, seeking a business purpose, non-owner-occupied loan.
First-time investors are allowed, which surprises people, but with conditions: the DSCR must be greater than 1.0, the credit score must be above 700, there can be no exceptions on the file, and the loan is capped at $2,000,000. A first-time investor also may not be a first-time homebuyer. You have to own somewhere already.
Maximum loan size on the program is $3,000,000.
The entity and recourse rules
Investors commonly take title in an LLC, and that is contemplated here. Personal recourse is required for all guarantors meeting the requirements in the limited liability company section of the guidelines, and no additional borrowers are allowed to join an entity on title or on the subject loan.
Read that twice if you were planning to add a partner to the entity late in the process. It is a structural decision, made early.
The cash-out rule that ends files
Any loan where cash-out proceeds would be used for personal purposes is not eligible for the Sharp DSCR program. This is a business purpose loan. Pulling equity out of a rental to buy another rental, fund a renovation or cover business costs is consistent with that. Pulling it out to pay off personal credit cards or buy a boat is not, and misrepresenting the purpose on a business purpose loan is a serious problem, not a technicality.
If the money is genuinely for personal use, you want a different structure, and a cash-out refinance on a property you occupy is a different conversation entirely.
Why this matters in Scottsdale specifically
Scottsdale rental math is unusual. Purchase prices carry a premium that long-term rents do not fully track, which means a property that looks strong as an asset can land below 1.0x coverage on a straight long-term lease. That is precisely the gap a program with a 0.75x floor is built to cover, and it is also precisely the gap that should make you check the ratio before you are emotionally committed to a property.
It is also why short-term rental income is such a significant lever here, with its own rules, its own leverage cap and its own documentation standard. That is a separate post in this series, and if you are buying in Old Town or anywhere near the spring training and tournament corridor, read it before you model your returns.
Run it yourself first
The arithmetic is not hidden. Take the market rent, divide by the full monthly payment including taxes, insurance and any association dues, and you have your coverage ratio. If the answer starts with a zero, you now know what conversation you are having.
Why bring this file to us
- We run coverage before you write the offer. A property that misses on ratio is knowable from the rent and the payment, and it takes minutes.
- We know the entity rules. Title in an LLC is normal on these files, and the personal recourse and guarantor requirements are specific.
- We place the file where the ratio fits. A 0.80x property and a 1.30x property belong at different investors, which is what a broker is for.
- Broker model. Multiple investors rather than one bank's shelf, which is what a file like this needs when the first answer is no.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me the address and the lease or the market rent, and I will run the coverage ratio before you put anything under contract.
Program figures in this post are from the CMG Financial (NMLS #1820) guideline set named above, as published on the revision date given. They describe one investor's program at one point in time. Other investors price and underwrite the same borrower differently, guidelines change without notice, and nothing here is an offer of any specific program or terms. Confirm current eligibility on your own file before you plan around any of it.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, income and asset verification, and other qualifying factors. Not all applicants will qualify. Non-QM, asset-based and business purpose financing carry different pricing, terms and consumer protections than agency financing. Consult your tax advisor regarding the tax treatment of any income or distribution strategy.
Run the coverage ratio before you write the offer
DSCR files are decided by the rent against the payment. Send the address and the rent and I will tell you where the ratio lands before you are committed.
