Home / DSCR / If you might sell in year two, read the penalty first.
Updated September 2026
DSCR guide
If you might sell in year two, read the penalty first.
A lot of DSCR pricing assumes you keep the loan. The trade is a prepayment penalty, often a declining schedule over three to five years. If you plan to flip, sell, or refinance inside that window, the penalty can erase the reason you took the rate. Tell us the exit before we pick a product. A step-down penalty is not the same as a hard yield-maintenance commercial clause, but it is still real money.
Sending a file is not an approval and not a credit pull. We text the same business day. We do not call. If we can structure it, we name the door. If we cannot, we say so.
The screen
| Exit | What to ask |
|---|---|
| Hold 5+ years | A penalty can be the cheaper rate |
| Sell or refi inside 3 years | Price a shorter penalty or none |
| BRRRR | The penalty has to survive the next refinance |
| Penalty math | Percent of the balance, declining by year |
What we fund
- Buy-and-hold rentals
- Investors who already know the sale date
- Files where the penalty is the whole question
What we still need. Short list.
- Credit is still reviewed. A lower score changes leverage, it does not skip the file.
- Reserves and down payment, sourced, when that screen asks for them.
- Appraisal plus a lease, market rent, or a short-term rent schedule.
- Entity documents if you close in an LLC.
Questions
Can I get DSCR with no prepayment penalty?
Sometimes, at a different price. Ask. Do not assume the cheapest rate has no penalty.
Does a penalty apply to extra principal payments?
Read the note. Some allow a small annual prepay. Some charge on any large payoff.
Is this the same as a commercial prepay?
Usually no. It is still a cost if you exit early. We will quote the schedule, not hide it.
Related
These are the guidelines we screen. They are not a promise that your file hits the maximum. Credit-event seasoning, occupancy, and property condition still have to be confirmed. Not a commitment to lend. We text. We do not call.