A District of Columbia DSCR loan is business-purpose financing on a 1-4 family rental, often secured by a deed of trust. DC taxes the recording of a deed of trust at 1.1% of the debt secured under D.C. Code 42-1103, with purchase-money exemptions.
The District taxes the loan itself at recording, at 1.1% of new principal on a refinance. Its foreclosure law requires written notice before a power-of-sale sale.
If you're comparing a DSCR loan with a bank loan in DC, start with the side-by-side on limits and pricing.
How much is DC's recordation tax on a rental property loan?
DC taxes a deed of trust at 1.1% of the debt secured under D.C. Code 42-1103(a)(3)(A); a refinance is taxed only on new principal above the previously taxed balance, and a qualifying purchase-money deed of trust is exempt.
- The purchase-money exemption requires the deed of trust to be executed and recorded within 30 days of the deed, with the instrument stating it is purchase money, under 42-1103(b-1).
- On the purchase deed, the Office of Tax and Revenue lists recordation and transfer taxes of 1.1% each under $400,000 and 1.45% each at $400,000 or more for residential property.
Exception: Commercial rates and other exemptions were not confirmed here. Get the figure from the title company.
According to D.C. Code 42-1103 and the DC Office of Tax and Revenue, Recorder of Deeds FAQs, as of October 2026.
How are rental property loans foreclosed in DC?
D.C. Code 42-815(c) permits foreclosure under a power of sale in a deed of trust or mortgage, but the sale cannot take place unless the noteholder first gives written notice of the intention to foreclose, with a copy to the Mayor at least 30 days before the sale.
- For a residential mortgage, 42-815(b) also requires a mediation certificate before the notice issues.
- Whether the mediation rule reaches an investor loan was not resolved here.
Exception: Ask the lender and a DC attorney how 42-815's notice and mediation steps apply to a specific loan.
According to D.C. Code 42-815, Council of the District of Columbia, as of October 2026.
Does DC limit prepayment penalties on rental property loans?
D.C. Code 28-3301(f) limits prepayment charges on loans secured by residential real property, but 28-3301(d)(1) removes from the chapter a loan over $2,500 that is not secured by the borrower's place of residence when a listed condition applies, such as a business or investment purpose, which may take a business-purpose rental loan outside it.
- Within the chapter, prepayment charges are barred after three years and limited before that.
- The (d)(1) exclusion turns on conditions listed in the statute; read them for a specific loan.
Exception: This reading comes from the statute text, not regulator guidance. Ask the lender and get prepayment terms in writing.
According to D.C. Code 28-3301, Council of the District of Columbia, as of October 2026.
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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.