DSCR refinance loan against a property leased on a lease option

[Brian Kempler]

Hi, if I lease my house to a tenant, and the tenant has an option to purchase, will DSCR lenders look unfavorably upon the tenant's purchase option? Are DSCR refinance loans ever approved in this case?

[Nick Belsky]

@Brian Kempler

I haven't had a lender reject a lease due to this specifically, but the tenant purchase option would be an exit option. If your DSCR has a prepayment penalty, you'd need to make sure you account for that penalty in the sales price to offset it. From the tenant's pov, I don't see why a conventional lender would have issues with a tenant buying the property as a primary that they've been living in.

Cheers!