The option moves the ratio, and it moves the risk too
Quick answer: An interest-only DSCR loan lets a rental-property investor pay interest only for an opening period, usually 5 or 10 years. The payment drops, so the debt service coverage ratio rises. On the illustrative 315,000 dollar loan worked through below, the ratio moves from 1.01 to 1.11 purely on the payment structure. Nothing about the property changes. The catch arrives at the end of the interest-only window. The full balance then amortizes over whatever term is left, so the payment on that same loan climbs to 2,480.15 dollars a month, which is higher than it would ever have been on a normal amortizing schedule.
Interest-only is the largest single lever an investor has over the DSCR calculation, and it is the one nobody explains in dollars. Every lender publishes a ratio bar. Few say which payment goes underneath the rent. So a deal that looks marginal on one worksheet clears comfortably on another, and the reason is a structural choice rather than anything about the house. This page runs the same loan three ways with the arithmetic shown, then says plainly what the option costs you on the other side.
Key takeaways
- The ratio is a fraction, and interest-only shrinks the bottom of it. Rent stays the same. The payment falls, so the coverage number rises. On the worked example that is a move from 1.01 to 1.11.
- At a 1.20 bar, the option is worth about 298 dollars a month of market rent. That is the difference between the rent needed to clear 1.20 on an interest-only payment and the rent needed to clear it on a fully amortizing one.
- The reset is worse than most people expect. Ten interest-only years on a 30-year note leave 20 years to repay the whole balance. The payment goes to 2,480.15 dollars, which is 341.97 dollars a month above the payment you would have carried from day one.
- Term length decides how brutal the reset is, not the interest-only feature. Put the same 10-year interest-only period on a 40-year loan and the payment afterwards is 2,138.18 dollars, identical to a plain 30-year schedule.
- Regulation Z never enters the room. A business-purpose rental loan is exempt under 12 CFR 1026.3(a)(1), so the qualified-mortgage rules that bar deferred principal and cap the term at 30 years simply do not reach it.
What is an interest-only DSCR loan?
An interest-only DSCR loan is a rental-property mortgage that qualifies on the property's own income and lets you pay interest alone for an opening period. Two separate ideas sit inside that sentence, and keeping them apart makes everything else easier.
The first idea is the qualifying method. A DSCR loan divides the property's gross monthly rent by its monthly PITIA, which is principal, interest, taxes, insurance and association dues. The result is the debt service coverage ratio. At 1.00 the rent exactly covers the payment. Above 1.00 there is a cushion, and below it there is a shortfall the owner funds from somewhere else.
The second idea is the payment structure. During an interest-only period the scheduled payment covers interest and nothing more, so the balance does not fall. The arithmetic is simple. Multiply the balance by the annual rate, then divide by twelve. Nothing amortizes until the period ends.
Why the two ideas interact
Put them together and the consequence is immediate. The qualifying ratio is measured on the payment you are scheduled to make, so a smaller scheduled payment produces a larger ratio on identical rent. Interest-only is therefore not a side feature on a DSCR loan. It is a direct input to the test the file has to pass.
That is also why the option is priced. A structure that improves a borrower's qualifying position while slowing repayment carries risk the lender is being asked to hold, and lenders charge for it in rate, in leverage, or in both. Our companion page on how DSCR prepayment penalties are priced covers the same trade in a different currency.
How much does interest-only lift the ratio?
Enough to change the answer on a marginal file, and the amount is worth seeing in dollars rather than in principle. Everything in this section is an illustrative example on a single-family rental in the Las Vegas valley. It is not a quote and it is not an offer of terms.
Assume a purchase price of 420,000 dollars with 25 percent down, which is 105,000 dollars, leaving a loan of 315,000 dollars. Assume the same 30-year note is quoted two ways, at 1,890.00 dollars a month interest-only or 2,138.18 dollars a month fully amortizing. Assume taxes of 400 dollars a month and landlord insurance of 95 dollars a month, with no association dues. Those payment figures are assumptions chosen so the arithmetic below can be checked line by line. They are not terms available to anyone, and in keeping with the rest of this cluster no interest rate is quoted on this page.
The three payments, worked out
Interest-only payment. 1,890.00 dollars a month. Across a year that is 22,680 dollars, and every cent of it is interest, because no principal is scheduled.
Fully amortizing 30-year payment. 2,138.18 dollars a month, the figure the standard amortization formula returns on the same balance and the same terms across 360 payments.
The gap between them. 2,138.18 minus 1,890.00 is 248.18 dollars a month. That is what the interest-only option removes from the denominator.
Now build the PITIA on each structure and divide an illustrative market rent of 2,650 dollars a month into it. Moreover, notice that only one line in the whole calculation actually changes.
| Structure | P and I | Taxes and insurance | PITIA | DSCR at 2,650 rent |
|---|---|---|---|---|
| Interest-only | 1,890.00 | 495.00 | 2,385.00 | 1.11 |
| 30-year amortizing | 2,138.18 | 495.00 | 2,633.18 | 1.01 |
| After the reset, 20 years left | 2,480.15 | 495.00 | 2,975.15 | 0.89 |
The middle row is the one that decides deals. A ratio of 1.01 is a knife edge. Similarly, plenty of programs treat anything under about 1.10 as their thinnest tier and price it accordingly. The top row clears that line without a single change to the house, the rent or the borrower.
Your credit tier pulls the same lever from the other end. The tier sets the leverage a program will hand you, leverage sets the loan size, and the loan size sets the payment sitting in that denominator. What a credit score actually decides on a DSCR file works that chain through with the same kind of arithmetic.
Reading it the other way round
The same fact is easier to act on when you invert it. Instead of asking what ratio a given rent produces, ask what rent a given ratio demands. At a 1.20 bar the interest-only structure needs 1.20 multiplied by 2,385.00, which is 2,862.00 dollars of qualifying rent. The amortizing structure needs 1.20 multiplied by 2,633.18, which is 3,159.82 dollars.
The difference is 297.82 dollars a month. In other words, the interest-only option is worth roughly 298 dollars of monthly market rent at that bar. In a valley where three-bedroom rents cluster tightly, that is often the difference between a property that qualifies and one that does not. You can run your own numbers through our Las Vegas DSCR calculator. A larger deposit is the equity side of the same problem, and the two levers can be pulled together.
Want your Las Vegas rental run both ways before you commit?
Send the address, the purchase price and the rent you expect. You get the ratio on an amortizing payment and on an interest-only payment, side by side, with the arithmetic shown rather than asserted. Current as of September 2, 2026.
Get your fast quoteWhat happens when the interest-only period ends?
The loan starts amortizing, and it has less time left to do it in. That is the whole mechanism, and it is harsher than the phrase "the payment adjusts" suggests.
Take the same 315,000 dollar loan on a 30-year note with a 10-year interest-only period. Ten years in, not one dollar of principal has been repaid, so the balance is still 315,000 dollars. However, only 240 payments remain. The formula now has to retire the entire balance across 20 years instead of 30.
The post-reset payment. The same 315,000 dollars on the same terms, spread across the 240 payments that remain, computes to 2,480.15 dollars a month.
Against the interest-only payment. 2,480.15 minus 1,890.00 is 590.15 dollars, a jump of 31.2 percent in a single month.
Against the payment you skipped. 2,480.15 minus 2,138.18 is 341.97 dollars. Therefore the payment after the reset is higher than the payment would ever have been if the loan had simply amortized from day one.
That last line is the part worth sitting with. An interest-only period does not remove principal from the loan. It postpones it and then compresses it, so the eventual payment is larger, not merely restored.
What the ten years actually cost
Two numbers describe the price. First, interest. Ten years of interest-only payments at 1,890.00 dollars come to 226,800.00 dollars. Ten years on the amortizing schedule pay 213,149.20 dollars of interest, so the interest-only route costs 13,650.80 dollars more over the same decade.
Second, equity. On the amortizing schedule the balance after 120 payments is 271,567.25 dollars, meaning 43,432.75 dollars of principal has been retired. On the interest-only schedule the balance is still 315,000 dollars. As a result the owner reaches year ten with a larger debt, a larger payment, and a ratio that has gone the wrong way.
In the table above, that final state is the 0.89 row. Same house. Same rent. The property no longer covers its own payment.
Does a longer term soften the reset?
It does, and this is the detail that separates a well-structured interest-only loan from a badly structured one. The reset is severe because the remaining term is short, not because principal was deferred.
Run the same 10-year interest-only period on a 40-year loan. When it ends, 360 payments remain instead of 240. Consequently the balance amortizes over 30 years, and the payment computes to 2,138.18 dollars, which is exactly the plain 30-year amortizing payment from the first table.
| Structure | Payment during the interest-only years | Remaining term at reset | Payment after the reset | Increase |
|---|---|---|---|---|
| 30-year note, 5-year interest-only | 1,890.00 | 25 years | 2,266.70 | 376.70 |
| 30-year note, 10-year interest-only | 1,890.00 | 20 years | 2,480.15 | 590.15 |
| 40-year note, 10-year interest-only | 1,890.00 | 30 years | 2,138.18 | 248.18 |
Read the bottom row carefully, because it is the useful one. A 40-year term with a 10-year interest-only period buys a decade of the lower payment and then hands you the payment a normal 30-year loan would have started with. In contrast, the middle row buys the same decade and hands you something worse than the starting point.
The 40-year structure is not free. A longer schedule means more total interest and slower equity, and lenders price the term. Still, if the interest-only feature is what makes the deal work, the term is the lever that decides whether the exit has to be a sale.
Why is deferred principal allowed here at all?
Because the federal rule that restricts it does not apply to this kind of loan. This is worth stating precisely, since it explains why structures unavailable on a home you live in are routine on a rental.
Regulation Z, the Truth in Lending Act's implementing rule, exempts business-purpose credit. The text is at 12 CFR 1026.3(a)(1), which exempts "an extension of credit primarily for a business, commercial or agricultural purpose." A loan on a non-owner-occupied rental, made to an investor who will not live there, sits inside that exemption.
What the exemption switches off
Two qualified-mortgage conditions are the interesting ones. Under 12 CFR 1026.43(e)(2), a qualified mortgage must provide regular periodic payments that do not "allow the consumer to defer repayment of principal," and its loan term "does not exceed 30 years." An interest-only feature fails the first condition. A 40-year term fails the second.
On a consumer mortgage those conditions push a lender outside the qualified-mortgage safe harbour, which is why interest-only options on primary residences are scarce. On a business-purpose rental loan the conditions are not in play, because the transaction never enters Regulation Z in the first place. That is the legal reason a 40-year interest-only structure exists on the investment side and effectively does not exist on the owner-occupied side.
Important. The exemption is about the purpose of the credit, not about the paperwork. A property the borrower or a family member occupies is not business-purpose, and calling it one does not make it so. Occupancy misrepresentation is loan fraud, and it is the single most common way an investor file goes badly wrong. Our page on holding a Las Vegas rental in an LLC covers the ownership side of the same question.
Which rent sits on top of the ratio?
The rent the file uses, which is not always the rent on your lease. Since the interest-only option is doing work on the bottom of the fraction, it is worth knowing how the top of it gets set.
An appraiser establishes market rent on a published form. For a one-unit property that is the Single-Family Comparable Rent Schedule, Fannie Mae Form 1007. For a two-to-four-unit property it is the Small Residential Income Property Appraisal Report, Form 1025. Both are agency forms, and the appraisal industry uses them on non-agency files too. There is a fuller treatment of where the rent schedule can disagree with your lease on our DSCR appraisal page.
Fannie Mae's own rule for its loans is instructive even though a DSCR loan is not sold to Fannie Mae. Selling Guide topic B3-3.8-02, updated September 2, 2026, tells a lender that where "current market rents do not reasonably support the gross rents reported on the lease agreement," it must document the discrepancy in writing or "use the lesser amount." Most rental-income programs, agency or not, land in the same place. A lease above the appraiser's opinion rarely helps.
The Nevada wrinkle on your lease
Nevada changed what a lease has to say in 2025, and the change matters here. Under NRS 118A.200, subsection 6, a written rental agreement must now state rent "as a single figure representing the maximum total amount of periodic rent that includes the amount of any mandatory fees." Subsection 9 makes a nonconforming agreement unlawful.
So a compliant Las Vegas lease bundles mandatory fees into the stated rent, while an appraiser's Form 1007 opinion is a rent-only figure. The two numbers are measuring different things. Consequently a Nevada lease can read higher than market rent for reasons that have nothing to do with the property, and the lesser-amount convention then bites. If you are relying on a lease to carry the file, read what your rent figure actually contains before the appraisal is ordered. Our page on what a DSCR file has to show walks the rest of the document list.
What else grows while the payment stays flat?
Taxes and insurance, and in Nevada the tax side behaves differently on a rental than it does on a home. This is the quiet second erosion of a coverage ratio, and it runs on its own clock.
Nevada assesses all property at 35 percent of taxable value under NRS 361.225. Taxable value is the assessor's appraisal under NRS 361.227, not your purchase price, and it is usually lower. The state then caps how fast the bill can rise, and the cap is not the same for everyone.
| Property | Statute | Annual cap on the tax bill increase |
|---|---|---|
| Single-family residence that is the owner's primary residence | NRS 361.4723(1) | 3 percent |
| Residential rental dwelling, where the rent collected from each tenant does not exceed the county's HUD fair market rent | NRS 361.4724(1) | 3 percent |
| Other property, including a rental let above that line | NRS 361.4722(1)(b)(2) | Up to 8 percent |
Which cap applies to a rental
The 3 percent cap has two doors, and only one of them is about living there. NRS 361.4723(1) writes it for "the owner of a single-family residence which is the primary residence of the owner." NRS 361.4724 then opens a second door for landlords. If the rent collected from each tenant does not exceed the fair market rent HUD most recently published for the county, the owner of a residential rental dwelling gets that same 3 percent cap. Miss that line and the property falls under the general provision at NRS 361.4722, where the ceiling is the lesser of a formula and 8 percent.
So the tax side of your PITIA turns on where your rent sits against a HUD figure, which is an odd thing to have to check and an easy one to miss. Notice the direction of the trade, because it runs against you twice. The same higher rent that lifts your coverage ratio is what can push the property out of the 3 percent bracket and into the one that climbs at up to 8. Over a 10-year interest-only period that difference compounds while the principal and interest line sits perfectly still. The 2,650 dollar rent in the worked example above would have to be checked against the current Clark County figure before you could assume either cap applies.
Insurance moves too, and a landlord policy is priced on the exposure rather than on your history as a homeowner. Both lines belong in the projection you build before you take the option, not in the surprise you get afterwards.
When does interest-only make sense?
When the exit is real and dated. Interest-only is a timing tool, so the question is never whether the lower payment is nicer. Of course it is. The question is what happens on the day it ends.
The cases where it works
- A defined hold with a planned sale. If the property is going to market inside the interest-only window, the reset never arrives and the deferred principal is simply capital you kept working elsewhere.
- A property being repositioned. Rents on a unit mid-renovation do not yet reflect what it will earn. A lower payment during the lift, followed by a refinance once the rent roll supports it, is a coherent plan.
- A portfolio being built deliberately. Roughly 248 dollars a month held back on each of four properties is close to a thousand dollars a month of retained cash flow, which is how reserves get funded.
- A long term underneath it. The 40-year row in the table above is the version of this structure that does not require a sale to survive its own reset.
The cases where it does not
- A buy-and-hold with no refinance plan. If the intention is to own the property for 30 years, the reset is not a risk, it is a certainty, and it lands at a payment above where you would have started.
- A file that only clears the ratio on the interest-only payment. That is worth knowing rather than hiding. A deal at 1.11 interest-only and 1.01 amortizing is really a 1.01 deal with a decade of grace attached.
- A ratio bar you are gaming rather than meeting. Structuring to clear a threshold you would otherwise miss transfers risk to the year you can see least clearly.
What should you ask before you take it?
Five questions settle it, and all five have short factual answers a lender can give you in writing.
- What is the note term, and how many months amortize after the interest-only period ends? This single number decides the size of the reset. Ask for it in months, not in adjectives.
- What is the payment on the day the interest-only period ends, at the note rate? Ask for the figure, then check it. The formula is public and the arithmetic on this page is the same arithmetic.
- Does the rate change at the reset, or only the payment? A fixed-rate interest-only loan resets the payment alone. An adjustable one can reset both, and the two outcomes are not comparable.
- What does the interest-only option cost in rate or leverage? The trade is usually visible in one of them. Ask which, and by how much.
- Is there a prepayment penalty, and does it run past the interest-only period? If the exit plan is a refinance, a penalty that outlives the interest-only window can make that plan expensive.
Answers to all five belong in the file before you commit, not in a conversation you half remember. For the wider set of questions worth asking, see our guide to choosing a DSCR lender, and for the equity route later, how a DSCR cash-out refinance works.
Interest-only DSCR loans: FAQ
How the structure works
Does an interest-only DSCR loan improve my ratio?
Yes, and the improvement comes entirely from the denominator. The debt service coverage ratio divides gross monthly rent by PITIA, so a smaller scheduled payment produces a larger ratio on the same rent. On the illustrative 315,000 dollar loan used on this page, the interest-only payment is 1,890.00 dollars against a fully amortizing payment of 2,138.18 dollars. With taxes of 400 and insurance of 95 a month, PITIA is 2,385.00 dollars interest-only and 2,633.18 dollars amortizing. Against an illustrative market rent of 2,650 dollars, that is a ratio of 1.11 rather than 1.01. Nothing about the property, the rent or the borrower changed.
How is the interest-only payment calculated?
Multiply the loan balance by the annual interest rate, then divide by twelve. On the illustrative 315,000 dollar balance used here that works out to 22,680 dollars of interest a year, or 1,890.00 dollars a month. Because no principal is scheduled, the balance does not move during the interest-only period, so the payment stays the same every month at a fixed rate. That is also why the payment is easy to verify yourself, and it is worth verifying rather than accepting.
The reset, and what it costs
What happens to my payment when the interest-only period ends?
The whole balance begins amortizing over whatever term is left, which is shorter than the original one. On a 30-year note with a 10-year interest-only period, 20 years remain and the full 315,000 dollars must be repaid inside them. On the illustrative figures used here that payment is 2,480.15 dollars a month, which is 590.15 dollars above the interest-only payment and 341.97 dollars above the payment the same loan would have carried if it had amortized from the start. The increase is not a restoration of a normal payment. It is a larger payment than you would ever have had.
Is a 40-year interest-only DSCR loan better than a 30-year one?
It is gentler at the reset, and it costs more over the full life. Put a 10-year interest-only period on a 40-year note and 30 years remain when it ends, so the same 315,000 dollar balance amortizes to 2,138.18 dollars a month on the illustrative figures used here. That is identical to the payment on a plain 30-year amortizing loan, and it is 341.97 dollars a month below the 30-year note's post-reset payment. The trade is more total interest, slower equity, and pricing that reflects the longer schedule. Which one is right depends on whether your plan needs the property to survive its own reset without a sale.
How much equity do I give up during the interest-only years?
On the illustrative example, 43,432.75 dollars. A 315,000 dollar loan amortizing normally on those figures would stand at 271,567.25 dollars after 120 payments. On the interest-only schedule it is still 315,000 dollars. The interest cost also differs: 226,800.00 dollars over those ten years interest-only, against 213,149.20 dollars amortizing, a difference of 13,650.80 dollars. Both figures are illustrative arithmetic rather than a quote, and both are reasons to date your exit before you take the option.
Rules, rent and eligibility
Why can a rental loan be interest-only when a home loan usually cannot?
Because Regulation Z does not reach a business-purpose loan. 12 CFR 1026.3(a)(1) exempts an extension of credit primarily for a business, commercial or agricultural purpose, and a loan on a non-owner-occupied rental sits inside that exemption. The qualified-mortgage conditions at 12 CFR 1026.43(e)(2) require regular periodic payments that do not allow the consumer to defer repayment of principal, and a loan term that does not exceed 30 years. An interest-only feature fails the first and a 40-year term fails the second, which is why both are scarce on owner-occupied lending and ordinary on the investment side. The exemption turns on the purpose of the credit, so a property you or a family member occupies does not qualify.
Which rent does the lender use, the lease or the appraiser's number?
Usually the lower of the two, and the appraiser's number comes from a published form: Fannie Mae Form 1007 for a one-unit property, Form 1025 for two to four units. Fannie Mae's Selling Guide topic B3-3.8-02, updated September 2, 2026, tells its lenders that where current market rents do not reasonably support the gross rents on the lease, they must document the discrepancy in writing or use the lesser amount. DSCR loans are not sold to Fannie Mae and each program writes its own rule, but most land in the same place. In Nevada there is an extra wrinkle, because NRS 118A.200 has required since 2025 that a lease state rent as one figure including mandatory fees, while the appraiser's opinion is rent only.
Article history
- September 2, 2026. First published. Sources read live for this build were Fannie Mae Selling Guide topics B3-3.1-08 and B3-3.8-02, the latter carrying a September 2, 2026 revision date, the Form 1007 and Form 1025 documents themselves, 12 CFR 1026.3 and 12 CFR 1026.43 at eCFR, and NRS 118A.200, NRS 361.225, NRS 361.4722 and NRS 361.4723 at the Nevada Legislature. Every payment, balance and ratio on this page was computed by hand from the loan amount and the illustrative rate rather than taken from any published table.
Sources refused
- September 2, 2026. A note rate and a Clark County combined tax rate were both deliberately left out. Every other page in this DSCR cluster states worked payments and quotes no rate, so this one follows that convention rather than breaking it. The Nevada Department of Taxation rate publication did not serve its document to this build, so the tax figure in the worked example is a stated illustrative assumption rather than a derived county number. The statutory assessment ratio and the abatement caps are cited because those did verify.
What the fact check changed
- September 2, 2026, same-day correction. An adversarial fact-check caught two errors within the hour and both are fixed above. The post-reset table gave the 5-year interest-only row as 2,264.28 dollars with an increase of 374.28, which was a hand-arithmetic slip. Recomputed across the 300 remaining payments the figures are 2,266.70 and 376.70. The row's own internal subtraction agreed with its own wrong number, so nothing short of an independent recomputation could have found it. Separately, the Nevada tax section asserted as a rule that a rental cannot reach the 3 percent abatement cap. That is false. NRS 361.4724 grants the same 3 percent cap to a residential rental dwelling whose rent to each tenant stays at or under the county fair market rent published by HUD, so the categorical sentence was replaced with the two-door rule and the table gained a third row.
Next review
- Next scheduled review: the next Fannie Mae Selling Guide announcement touching Chapter B3-3.8, or a Nevada legislative session that amends NRS 118A.200 or the NRS 361.472x abatement caps. Either moves a figure quoted above.
About the reviewer
See the reset before you sign, not after
One conversation gets you three numbers in writing. The payment during the interest-only years, the month the reset lands, and the payment on that day at the note rate. If a prepayment penalty runs past the interest-only window, you will hear about that too.
Start your fast quoteAcross Valley West: Investors who want to see how a different payment changes the same fraction can work through the payment side of the coverage-ratio math on our conventional lending site. The landlord policy sitting inside every PITIA figure above is quoted by Valley West Insurance, our insurance agency.
Keep reading
- DSCR loans in Las Vegas, start to finish
- Run your own ratio on the calculator
- What a DSCR file has to show
- How much you need to put down
- Prepayment penalties and what they cost
- Pulling equity back out later
- Non-QM lending in Las Vegas
The federal rules behind the structure
- Electronic Code of Federal Regulations, 12 CFR 1026.3, exempt transactions. Source for the business-purpose exemption at paragraph (a)(1), which is what places a non-owner-occupied rental loan outside Regulation Z entirely.
- Electronic Code of Federal Regulations, 12 CFR 1026.43, minimum standards for transactions secured by a dwelling. Source for the qualified-mortgage conditions at paragraph (e)(2): regular periodic payments that do not allow the consumer to defer repayment of principal, and a loan term that does not exceed 30 years.
Where the rent number comes from
- Fannie Mae Selling Guide B3-3.8-02, Rental Income from the Subject Property, carrying a September 2, 2026 revision date. Source for the Form 1007 and Form 1025 documentation requirement, and for the instruction that where current market rents do not reasonably support the gross rents on the lease, the lender must provide a written analysis or use the lesser amount.
- Fannie Mae Form 1007, Single-Family Comparable Rent Schedule and Form 1025, Small Residential Income Property Appraisal Report. The two appraisal forms that carry an appraiser's market rent opinion.
Nevada statutes cited above
- Nevada Revised Statutes 118A.200, rental agreements. Source for subsection 6, requiring rent to be stated as a single figure representing the maximum total periodic rent including any mandatory fees, and for subsection 9, which makes a nonconforming agreement unlawful. The section was amended in 2025.
- Nevada Revised Statutes chapter 361, property tax. Source for the 35 percent assessment ratio at NRS 361.225, for taxable value at NRS 361.227, for the 3 percent abatement cap at NRS 361.4723(1) which applies to a single-family residence that is the primary residence of the owner, for the second 3 percent cap at NRS 361.4724(1) which applies to a residential rental dwelling whose rent to each tenant does not exceed the county fair market rent most recently published by HUD, and for the 8 percent ceiling at NRS 361.4722(1)(b)(2) which applies to other property.
Last updated: September 2, 2026. Every regulation and statute cited above was read live on that date, and every payment, balance and ratio was recomputed by hand on that date.
This article is for general information and is not legal, tax or investment advice. Valley West Mortgage is an independent mortgage lender, NMLS #65506, licensed in Nevada. Equal Housing Opportunity. Valley West Mortgage is not affiliated with, or acting on behalf of or at the direction of, HUD, the FHA, the VA, the Consumer Financial Protection Bureau, Fannie Mae, Freddie Mac or any other government agency or government sponsored enterprise. Federal and agency material is cited here only as published public guidance. DSCR financing is business-purpose credit for non-owner-occupied investment property, and neither the borrower nor a family member may occupy the property. The payment figures used above are illustrative assumptions chosen so the arithmetic can be checked. They are not quotes, not terms available to any applicant, and no interest rate is quoted anywhere on this page. All figures on this page are illustrative. They are not an offer of credit, a rate quote, a preapproval or a commitment to lend, and program terms, interest-only availability, term length and pricing vary by lender and by property.
