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What is market rent on a DSCR loan?
Market rent is an estimate of the rental income a property could reasonably command in its local market. In investment-property and DSCR lending, it's usually supported by the appraiser's comparable rent schedule, such as Fannie Mae Form 1007, and may be used to determine the rent a loan qualifies on.
On a DSCR loan, the rent figure drives the ratio, so the source of that number matters. Market rent is especially important on purchases and vacant properties where there's no lease yet.
When there is a lease, programs differ in which number they use: the lease, market rent or the lower of the two, with variations for new leases and proof of receipt. Market rent doesn't automatically replace actual lease income.
The formula
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