Washington DSCR loan questions, answered

Yes, for business-purpose, non-owner-occupied investment property. Wholesale DSCR programs cover Washington single-family homes, townhomes, warrantable condos and 2-4 unit buildings, and small-balance programs cover 5-10 units. 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. Rural and recreational properties, such as cabins and acreage, usually narrow the programs that fit.

Many wholesale lender programs look for a ratio of 1.00 or higher, meaning the rent at least covers the full monthly payment of principal, interest, taxes, insurance and HOA dues. Some programs accept lower ratios with tradeoffs such as a larger down payment, and stronger ratios generally open more options. Example: $2,400 rent ÷ $2,000 payment = 1.20.

It affects your projections more than the lender’s math. Washington’s 2025 law (HB 1217) caps most residential rent increases in any 12-month period at a figure tied to inflation, with a fixed ceiling, and bars increases during the first 12 months of a tenancy. Lenders underwrite the current lease or market rent, so model future rent growth within the cap. Units whose first certificate of occupancy is less than 12 years old are among the exemptions. The Department of Commerce publishes the annual cap and runs a landlord resource center.

Often, yes. Seattle’s median home value is $950,800 and its median gross rent is $2,007 (ACS 2024; a general market benchmark, not a loan offer), so at typical leverage a payment that includes taxes and insurance can be larger than the rent. Investors usually close the gap with more equity, an ADU or multi-unit property, or a lender program that allows lower ratios. Spokane (median value $379,300, median gross rent $1,341) and Tacoma ($500,500 and $1,723) often pencil more easily.

Seattle limits short-term rental operators to two units: their primary residence plus one more. An investor who does not live in Seattle generally cannot operate a whole-home short-term rental there under their own license. Where a lawful short-term rental exists, some DSCR programs accept the income, but many Washington investors underwrite on long-term rent. The second unit also has to comply with Seattle’s Rental Registration and Inspection Ordinance (RRIO).

Typically: lender-set credit, reserve and equity minimums, an appraisal with a rent schedule, a lease or market-rent support, insurance quotes, and entity documents if you buy in an LLC. Personal tax returns and W-2s generally are not used to qualify. Requirements change with the DSCR, property type, loan size and condo project review. Comparing several lenders matters more in high-price markets, because each program handles larger loans and lower ratios differently.

No. DSCR loans arranged on this site are for business-purpose, non-owner-occupied investment property only. That rules out primary residences, second homes and properties where you or a family member would live in one unit or an ADU. You will sign occupancy and business-purpose statements. Owner-occupied financing is consumer lending, which this site does not arrange, and Washington regulators treat loans secured by a borrower’s primary residence differently.

No. Wholesale lender partners price each Washington file on credit, leverage, DSCR, property type, loan size and that day’s market, so this site does not show rates or pricing. Send a scenario through the application and we will show you the options that fit your property. Ask for full closing costs too, including title and escrow fees and, on purchases, who pays the real estate excise tax (usually the seller).

No. Loan Daddy LLC (NMLS #2827624) is a mortgage broker, not a lender. Washington DSCR loans are arranged with wholesale lender partners, who underwrite and fund them. DSCR Loans Washington is a Loan Daddy LLC brand.

Usually yes. Most wholesale DSCR programs lend to a Washington LLC or other entity, typically with personal guarantees from the members and the entity documents in order: certificate of formation, operating agreement, EIN letter and a certificate of good standing.

Often. It comes down to the lender’s rules for counting rent from the accessory unit and to the unit’s legal permitting status. You cannot live in either unit.

Not directly. Lenders underwrite to the current lease or market rent. The cap mostly limits how fast rent can grow after you buy.

Often, yes, for business purposes. The amount depends on the appraised value, leverage limits, the DSCR at the new loan amount and seasoning rules.

Some wholesale lender programs accept short-term rental income, usually documented with booking history or a third-party market rent analysis, as long as the rental is legal where it sits. In Seattle, the two-unit operator limit means most non-resident investors cannot rely on whole-home short-term income.

Under RCW 59.18.280, 30 days after the lease ends and the tenant vacates, with a full and specific statement of the basis for keeping any portion. Missing the deadline can make the landlord liable for the full deposit.

Lenders set their own insurance requirements, and earthquake coverage is usually a separate policy or endorsement. Whether or not a lender requires it, if you carry it the premium belongs in your DSCR calculation because it is part of the monthly cost of holding the property.

Single-family homes, townhomes, warrantable condos and 2-4 unit buildings are the core types, with 5-10 unit buildings through small-balance programs. Houses with permitted ADUs or DADUs often qualify. Rural acreage, cabins, mixed-use buildings and non-warrantable condos narrow the field.

Usually yes, with personal guarantees and the entity documents in order.