A Massachusetts DSCR loan is business-purpose financing on a 1-4 family rental, secured by a mortgage that carries the Statutory Power of Sale, which lets the lender sell the property by public auction after default.
Massachusetts writes its power of sale into statute, caps deposits tightly and has a prepayment law whose reach over rental loans isn't clear from the text. That last point is worth a direct question to any lender before you sign.
If your Massachusetts rental is a 2- or 3-family home and you'll live in one unit, read how owner occupancy changes the loan.
How are rental property loans foreclosed in Massachusetts?
Massachusetts mortgages carry a Statutory Power of Sale under G.L. c.183, s.21, which allows the mortgagee to sell the mortgaged premises by public auction on or near the premises after a breach.
- G.L. c.183, s.18 gives a deed that follows the statutory Mortgage Deed form the effect of a mortgage with the statutory condition and power of sale.
- G.L. c.183, s.21 defines the Statutory Power of Sale.
Exception: Foreclosure procedure in chapter 244 adds notice and other requirements that were not reviewed here.
According to G.L. c.183, s.21 and G.L. c.183, s.18, Massachusetts Legislature, as of October 2026.
Does Massachusetts limit prepayment penalties on rental property loans?
G.L. c.183, s.56 caps prepayment charges on notes secured by a dwelling house of four or fewer households at the lesser of the rest of the first year's interest or three months' interest, but whether its owner-occupancy wording reaches a rental the borrower doesn't occupy is not settled by the text.
- The statute covers a first or junior lien on a dwelling house of 4 or fewer separate households, or a residential condominium unit occupied or to be occupied by the mortgagor.
- Its wording leaves open whether the occupancy phrase applies to 1-4 family houses or only to condominium units.
- Under s.56, no prepayment fee may be charged once the note is paid in full more than 36 months after its date.
Exception: Ask the lender whether it applies c.183, s.56 to its business-purpose loans, and get the answer in writing.
According to G.L. c.183, s.56, Massachusetts Legislature, as of October 2026.
Does the Massachusetts deeds excise apply to a mortgage?
No. The Department of Revenue's Directive 89-12 states that the deeds excise does not apply to any instrument or writing given to secure a debt, under G.L. c.64D, s.1.
- The deeds excise applies to deeds that convey real property for consideration.
- Directive 89-12 applies that rule to any instrument given to secure a debt, which describes a mortgage.
Exception: Registry of deeds recording fees still apply and are not covered here.
According to DOR Directive 89-12, Massachusetts Department of Revenue, as of October 2026.
What Massachusetts landlord rules affect a rental property's numbers?
Massachusetts caps a security deposit at the first month's rent and requires its return within 30 days after the tenant's occupancy ends, under G.L. c.186, s.15B.
- G.L. c.186, s.15B(1)(b)(iii) sets the first-month cap.
- G.L. c.186, s.15B(4) sets the 30-day return deadline.
Exception: Section 15B carries detailed handling, receipt and interest rules. Read the whole section before you collect a deposit.
According to G.L. c.186, s.15B, Massachusetts Legislature, as of October 2026.
Local guides for Massachusetts: Boston.
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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.