A DSCR loan is business-purpose financing on a 1-4 family rental, qualified mainly on the property's rent, but each state decides how the loan is secured, how it can be foreclosed, what tax applies when it's recorded and what landlord rules shape the rent. The guides below cover those rules state by state, each with its official source.
Pick your state to see the rules that affect a rental loan there. Each guide links the statute or agency page behind every point, so you can check it yourself or hand it to your attorney.
How do rental property loan rules compare by state?
This table compares three points for each state: whether loans use a mortgage or a deed of trust, how foreclosure works, and whether a state tax or fee applies to the loan. Not covered means that state's guide does not address the point.
| State | Security instrument | Foreclosure | State tax on the loan |
|---|---|---|---|
| Alabama | Mortgage | Power of sale outside court | Mortgage recordation tax of 15¢ per $100 |
| Colorado | Deed of trust | Public trustee sale | Not covered |
| Connecticut | Mortgage | Judicial: strict foreclosure or sale | Conveyance tax exempts mortgage deeds |
| Delaware | Mortgage | Judicial: scire facias and sheriff's sale | Realty transfer tax excludes mortgages |
| District of Columbia | Deed of trust or mortgage | Power of sale with notice | Recordation tax of 1.1% on deeds of trust |
| Hawaii | Mortgage | Judicial or power of sale | Conveyance tax exempts mortgages |
| Iowa | Mortgage | Judicial; non-judicial option the owner can reject | Transfer tax exempts mortgages |
| Kansas | Mortgage | Judicial, with redemption periods | Mortgage registration tax repealed from 2019 |
| Kentucky | Mortgage | Judicial, through court-ordered sales | $4 state tax per mortgage recorded |
| Louisiana | Mortgage (civil law) | Judicial: executory or ordinary process | Not covered |
| Maine | Mortgage | Judicial; power of sale for entity borrowers | Transfer tax exempts mortgage deeds |
| Maryland | Mortgage or deed of trust | Power of sale or court decree, ratified by the court | County-set recordation tax per $500 of debt |
| Massachusetts | Mortgage with statutory power of sale | Power of sale by public auction | Deeds excise does not apply to security instruments |
| Michigan | Mortgage | By advertisement or judicial | Transfer tax exempts security instruments |
| Missouri | Mortgage or deed of trust | Judicial or non-judicial | Not covered |
| Montana | Mortgage or trust indenture | Court action, or trustee sale on trust indentures | Not covered |
| Nebraska | Mortgage or trust deed | Trustee's sale or judicial | Documentary stamp tax exempts mortgages and trust deeds |
| New Hampshire | Mortgage with power of sale | Power of sale | Transfer tax exempts mortgages |
| New York | Mortgage | Judicial | Mortgage recording tax: 50¢ + 25¢ + 25¢ (30¢ in MCTD) per $100 |
| North Carolina | Deed of trust or mortgage | Power of sale with a hearing before the clerk | No state tax on deeds of trust |
| Ohio | Mortgage | Judicial | Conveyance fee exempts security transfers |
| Pennsylvania | Mortgage | Judicial | Not covered |
| Rhode Island | Mortgage | Power of sale or judicial | Conveyance tax exempts mortgages |
| South Carolina | Mortgage | Judicial | Deed recording fee applies to deeds, not mortgages |
| Texas | Deed of trust | Power of sale outside court; judicial available | Not covered |
| Virginia | Deed of trust (mortgages also used) | Trustee sale outside court | State recordation tax of 25¢ per $100 |
| Washington | Deed of trust or mortgage | Trustee's sale or judicial | Real estate excise tax excludes mortgages |
| West Virginia | Deed of trust | Trustee sale | Transfer excise excludes deeds of trust |
| Wisconsin | Mortgage | Judicial | Transfer fee exempts security conveyances |
Exception: County and city fees and taxes are not included. Each state guide names what was and wasn't covered.
Which cities have local DSCR guides?
These local guides cover city and county rules that add to state law, such as local transfer and recordation taxes, rental licenses and local deposit limits.
- Anne Arundel County, Maryland
- Baltimore City, Maryland
- Baltimore County, Maryland
- Boston, Massachusetts
- Cleveland, Ohio
- Columbus, Ohio
- Dallas, Texas
- Denver, Colorado
- Des Moines, Iowa
- Detroit, Michigan
- Fairfax County, Virginia
- Grand Rapids, Michigan
- Houston, Texas
- Howard County, Maryland
- Kansas City, Missouri
- Lexington, Kentucky
- Louisville, Kentucky
- Milwaukee, Wisconsin
- Montgomery County, Maryland
- New York City, New York
- Philadelphia, Pennsylvania
- Pittsburgh, Pennsylvania
- Portland, Maine
- Prince George's County, Maryland
- Providence, Rhode Island
- Seattle, Washington
- St. Louis, Missouri
- Toledo, Ohio
Which states are not available?
Services are not available for properties in California, Arizona or Nevada, or in any other state where licensing is required for residential 1-4 family investment advertising referrals.
More state guides are in progress. If your state isn't listed yet, you can still send an inquiry for a property outside California, Arizona and Nevada.
Ready to finance a rental?
Ten fields, one financing professional, and lenders shopped on your behalf.
Start your inquiryAbout DSCR Commercial Loan
DSCR Commercial Loan is an advertising publisher and referral service for business-purpose DSCR financing on one- to four-family rentals, not a mortgage broker or lender. With your consent, we refer your inquiry to one independent financing professional. Financing options, eligibility and terms are determined solely by that professional and the final lender.
Disclaimer
This page is general education about business-purpose real estate financing and state law as published by official sources on the date shown. It is not legal, tax or lending advice, not an offer to lend and not a rate quote. Laws and lender guidelines change; confirm current rules with the lender, the title company and your own attorney or tax adviser.