The rental pays. Rent covers the note, taxes, insurance, and a vacancy line you actually believe. You ran the spreadsheet twice. Then the bank or credit union ran debt-to-income on you and the file died. That is this page — not another glossary, and not a second explainer of what a DSCR loan is.
Funded Funding is a national private-money brokerage. We are not a bank. We are not an NMLS-licensed consumer mortgage lender. The loan is business-purpose, closed in an LLC or another business entity, underwritten on the asset and the deal. The desk floor is $100k. No owner-occupied. Start on the Funded Funding homepage if you need the product list first, or read what the desk is.
What DTI actually measures
DTI is debt-to-income: your monthly debt payments divided by the personal income the bank will count. On a conventional rental or investment-property loan, the bank is still underwriting you. The house is collateral. The ratio is personal.
Two piles get built. On the debt side: the proposed new payment plus every other monthly obligation they treat as yours — existing mortgages, auto notes, student loans, cards, and often the full payment on other rentals even when those houses cash-flow. On the income side: W-2 wages, or the net they extract from tax returns after their own add-backs and haircuts. That is not your investor spreadsheet. That is their consumer box.
A rental file usually lives or dies on back-end DTI — all counted debts versus income — because the new payment is one more liability on a person who already owns notes. The bank is not asking whether the tenant can pay the landlord. They are asking whether your personal income can carry another payment if the tenant does not. That is a reasonable consumer-mortgage question. It is a bad question for a full-time investor whose return is built to be thin on purpose. The broader bank-no map — property caps, personal-name closes, missing returns — is on when the bank says no on a rental. This page is the ratio itself.
Why a cash-flowing rental still fails DTI
Because cash flow is a property math problem and DTI is a personal-income math problem. Write-offs, a thin tax return, existing notes, and debts the bank will not net the way you do can push the ratio over their box even when rent covers the new payment on your spreadsheet.
The kill shots we see on investor files look like this:
- The return is doing its job. Depreciation, entity expenses, and cost segregation make the Schedule E or K-1 look weak. You invested to keep taxable income down. The bank reads that as “cannot afford another house.”
- There is no W-2 story. Self-employed, partner, or full-time investor: income has to be reconstructed from returns, and that number still may not clear their ratio.
- Existing notes count as debts first. Each financed rental adds a liability. Some shops credit a haircut of documented rent. Some will not. The debt is certain. The income credit is optional.
- Personal debts do not care that the house pays. Autos, cards, a HELOC on the primary, student loans — same ratio as the new rental payment.
- Guarantees leak through the entity. The portfolio sits in LLCs. You still signed personally on enough notes that those payments land on your DTI.
- The new payment is added in full, immediately. Your pro forma assumes a tenant and a rate you hope to get. Their worksheet uses the payment they quoted, starting now, against the income they already decided you have.
None of that means the deal is a bad rental. It means you asked a consumer underwriter to bless an investor tax strategy. Those two systems are not designed to agree.
The two questions: you vs the property
A bank rental / conventional investment-property loan asks whether you can carry the note on personal income. Private money on a rental — the DSCR-style file — asks whether the property can (monthly rent ÷ monthly PITIA). The formula stays on what a DSCR loan is. The side-by-side stays on DSCR vs a bank rental loan. This page will not rewrite those.
- Who is the borrower? Bank rental: typically you, personally. This desk: the LLC (or other business entity). That is why investors form the entity before they ask for the money.
- What gets qualified? Bank: your income and DTI. DSCR-style: rent vs payment (the ratio).
- What happens to write-offs? Bank: they shrink the income they will use. Cash-flow path: they are mostly irrelevant to the property’s rent-versus-payment test.
- What happens to your other houses? Bank: more notes usually mean a worse personal DTI, plus conventional financed-property limits. Cash-flow path: each asset is its own coverage story. Portfolio overlays still exist. They are not the same as a personal DTI wall.
- Owner-occupy? If you will live there, stop. Wrong broker. Wrong license world.
We are not going to pretend banks are useless. If you have clean personal income, room in your DTI, a relationship, and a simple 1–4 unit rental the bank’s investment-property box allows, a bank (or credit union) loan can be the cheaper long-term hold. That is their path, not ours. If DTI already killed the file, do not shop us as a cheaper bank. Shop us as the other door.
A DTI no does not guarantee a private-money yes. The rent still has to cover the payment. A vacant house with a wishful market rent is still a weak file. A refinance that only works if we invent a rate is still a weak file. We will not invent a rate, a credit-score cutoff, a leverage number, a close-time promise, a funded-count, or a testimonial on this page. The homepage lists product points. Your quote still depends on the property, the entity, and the lender.
How banks build the ratio on an investor
Income is not rent collected. It is the number they can support from W-2s or from tax returns after their overlays. A year of strong collections in your software does not become qualifying income because you say so. If the return shows a loss, many shops will not let a spreadsheet talk them out of it. Rental income, when they count it at all, is often haircut for vacancy and then netted against a payment they already parked on the debt side — or they skip the net and add the full payment as debt. Two shops, two worksheets, same house. “But it cash-flows” is not an argument inside a box that never asked that question.
Debts are sticky. A note three payments from payoff may still count in full. A rehab card still counts. A quiet HELOC can still get an imputed payment. If it reports, it is in play. You are asking them to add a payment; the offset — rent — is the part they are most conservative about. So the file that looks like a raise in cash flow on your model looks like a raise in liabilities on theirs. If you are already past conventional financed-property limits, DTI is often the second wall, not the first. Clearing the ratio does not clear a property-count cap. That is still a bank-path problem, covered on the bank-no post.
What this desk is — and is not
Funded Funding is a national private-money brokerage. We are not a bank. We are not an NMLS-licensed consumer mortgage lender. This is a national desk, not a Phoenix-only shop. The public phone is (520) 552-7065 — an Arizona number. We do not publish an office address. Terms vary by lender, property, and borrower entity. Not available in every state.
The desk floor is $100k. Files under that are not this desk. Borrowers close in an LLC or another business entity. We do not stretch a rental file into an owner-occupied mortgage we are not licensed to do.
The product list on the homepage — Fix & Flip, DSCR, bridge, ground-up, GAP — is the menu. A DTI-killed hold is usually a DSCR-style rental file. A DTI-killed purchase that still needs time, rehab, or a takeout can be a bridge into that takeout. Do not force the label before the file is read.
Entity close, $100k floor, 1–4 vs 5+
Yes. The loan is business-purpose and closes in an LLC or another business entity — not as a consumer buying a primary residence. The loan is to the entity and the asset, not a W-2 mortgage. If the entity is not ready, that is a sequencing problem, not a DTI problem. Fix the entity first; the LLC funding note is the place for that.
The desk floor is $100k. Files under that are not this desk. Say the actual fund amount on the application.
This desk reads 1–4 unit investor files differently from 5+ unit and commercial files. A house, duplex, triplex, or fourplex is one kind of file. Five or more units, apartments, parks, and commercial are another. The intake asks which footprint you have because they are not the same path. Put the true unit count on the application.
When to stay on the bank path anyway
DTI is not always a dead end. Sometimes it is a timing problem: pay down a card, close a small installment note, wait until a year of returns shows the add-backs you need. If the cheaper long-term hold is worth that wait, wait. Private money is the other door, not a moral upgrade.
Stay on the bank path when you have documented personal income they will count, the ratio clears without fiction, they will close in the name you actually need, you are inside their financed-property limit, and the close can happen on their calendar. If any of those is already a no, shopping three more banks for a different DTI overlay is how files miss contracts. Repair the personal ratio, or stop asking a personal-ratio product to fund an entity asset. Those are different strategies. Mixing them is consumer gymnastics. We will not coach that here.
How to put the file here
- Confirm it is investor property. If you will occupy it, this site is not your lender.
- Entity ready to close. LLC or other business entity that can take title and the loan.
- Deal on paper. Address, purchase or refinance amount, rent (lease or a defensible market rent), unit count, and that DTI — or another personal-income test — is what already failed, if a bank already ran it.
- Do not invent the rent. The cash-flow path still needs a payment the property can cover. A DTI denial does not license a fictional lease.
- Apply. Same intake as the rest of Funded Funding: the application. Or call or text (520) 552-7065.
Still unsure whether the file is DSCR, a bridge into a takeout, or still a bank file you should repair? That is what the intake is for. We will tell you which product the deal is, including “this is still a bank file.” The rest of the investor blog is for the adjacent products — not for rewriting this ratio in five cities.
Frequently asked questions
What is DTI on a rental loan?
DTI is debt-to-income: your monthly debt payments divided by the personal income the bank will count. On a conventional rental or investment-property loan, the bank is still underwriting you. The house is collateral. The ratio is personal.
Why can a cash-flowing rental still fail DTI?
Because cash flow is a property math problem and DTI is a personal-income math problem. Write-offs, a thin tax return, existing notes, and debts the bank will not net the way you do can push the ratio over their box even when rent covers the new payment on your spreadsheet.
Is Funded Funding a bank?
Funded Funding is a national private-money brokerage. We are not a bank. We are not an NMLS-licensed consumer mortgage lender.
What is the minimum to fund?
The desk floor is $100k. Files under that are not this desk.
Do I close in an LLC?
Yes. The loan is business-purpose and closes in an LLC or another business entity — not as a consumer buying a primary residence.
Does a DTI denial mean the deal is dead?
It means the bank path is closed or expensive. It does not mean the property cannot support a business-purpose loan. It also does not guarantee a private-money yes. The rent still has to cover the payment.
Can I use this if I will live in the property?
No. This desk does not do owner-occupied files. If you will live there, you need a consumer mortgage shop — not this site.
Ready to get funded?
If DTI already killed a rental that pays — or you already know it will — and you have an LLC and a property that has to stand on its own rent, send the file. Same intake as every other investor product on this site.
No fake funded counts. No stock testimonials. No owner-occupied stretch. No teaser rate that is not your file. No second “what is DSCR” essay. The ratio that killed the bank file is the reason this page exists.
Ready to get funded?
Apply on the same intake we use live, or call or text (520) 552-7065.