The complete qualification matrix for DSCR financing on sober living / recovery housing properties — including FICO tiers, LTV limits, down payment requirements, and documentation standards. No income documentation required.
These figures reflect the aggregated program parameters across our 13+ lender network for sober living / recovery housing DSCR financing. Individual lenders may vary on secondary criteria, but these represent the available range.
This is the single most important aspect of sober living / recovery housing DSCR underwriting to understand — and the area where most loan officers outside this niche get it wrong.
Market rent from Form 1007 is the qualifying income basis. Form 1007 — the Single-Family Comparable Rent Schedule — is completed by the same licensed appraiser who appraises the property. The appraiser identifies 2–3 comparable rentals in the surrounding market and derives an estimated market rent for the subject property. This figure — not actual collected rent, not niche-specific income — is what DSCR underwriting uses.
Why market rent instead of actual income? Because market rent provides an objective, appraiser-verified figure that is independent of occupancy fluctuations, management arrangements, and the specific use of the property. It makes sober living / recovery housing properties underwritable on the same standard as any residential rental.
Asset depletion as a supplement. If market rent on Form 1007 doesn't fully support debt service, asset depletion is a structuring option. Under asset depletion methodology, a portion of your verified liquid assets (bank accounts, investment accounts) is converted into an imputed monthly income figure that supplements the DSCR analysis. This is not available on all programs but is a meaningful alternative for investors with substantial liquidity.
What is not qualifying income: W-2 wages, self-employment income, tax return profits, niche-specific income streams, platform income, or any other personal income source. These are not part of the DSCR underwriting equation.
Several common investor profiles that struggle with conventional lending qualify comfortably for DSCR sober living / recovery housing financing:
No. DSCR qualification is based on market rent as estimated by a licensed appraiser using Form 1007. Per-bed or per-resident income isn't used in the DSCR calculation — though it's often what makes sober living properties attractive as investments.
Yes. DSCR loans fully support LLC and corporate entity ownership. Entity ownership is common among sober living property investors and presents no obstacle to DSCR qualification.
The minimum FICO is 600. At 720+ you unlock the best LTV programs, including up to 85% LTV on purchase and rate-term refinance and 15% down payment. Lower FICO tiers still qualify with adjusted down payment requirements.
DSCR programs don't have a hard minimum DSCR requirement — there are sub-1.0 programs and no-ratio programs available. If standard DSCR analysis doesn't work for your property, experienced originators can route your deal through the appropriate program.
Programs are available in 47 states. New York is not included in this network.
Quick Answers
DSCR = market rent (Form 1007) ÷ monthly debt service. The lender appraises market rent for the property as standard residential real estate. Operator lease income demonstrates stable occupancy but is not the underwriting basis. No-ratio programs available when market rent doesn't cover the mortgage.
Minimum 600 FICO. At 720+: 15% down, 85% LTV. At 640: 25-30% down. At 600: 40% down. Cash-out capped at 80% LTV. No-ratio programs available. Property must be a residential home (6 beds or fewer), not a large clinical facility.
No. Passive investors who buy and lease to a licensed sober living operator do not need any license. Owner-operators also qualify. DSCR qualification is based on the property's market rent — not the borrower's license status or operating credentials.