A Washington DSCR loan is business-purpose financing on a 1-4 family rental, secured by a deed of trust foreclosed by trustee's sale or a mortgage foreclosed in court. The state's prepayment rules exclude loans secured by rental property under RCW 19.144.010.
Washington writes the rental-property carve-out directly into its mortgage lending law. The excise tax that hits the sale of the property also stays off the loan itself.
Washington coastal and river properties can sit in flood zones; check when flood insurance is required.
How are rental property loans foreclosed in Washington?
Washington allows non-judicial foreclosure of deeds of trust by trustee's sale under RCW chapter 61.24, and judicial foreclosure of mortgages in superior court under RCW 61.12.
| Instrument | Washington foreclosure path |
|---|---|
| Deed of trust | Trustee's sale under RCW 61.24 |
| Mortgage | Action in superior court under RCW 61.12 |
Exception: Trustee's sale procedure has its own notice requirements in chapter 61.24; read them if you're buying at foreclosure.
According to RCW 61.24.020 and RCW 61.12.040, Washington State Legislature, as of October 2026.
Does Washington limit prepayment penalties on rental property loans?
Washington's prepayment limit in RCW chapter 19.144 applies to residential mortgage loans, and RCW 19.144.010 excludes a borrower credit transaction secured by rental property from that definition.
- RCW 19.144 restricts prepayment penalties on covered residential mortgage loans.
- If the loan is secured by rental property, then it falls outside the RCW 19.144 definition and prepayment terms come from the contract.
Exception: Prepayment structures vary by lender. Get the schedule in writing.
According to RCW 19.144.010, Washington State Legislature, as of October 2026.
Does Washington's real estate excise tax apply to a mortgage?
No. The definition of a sale in RCW 82.45.010(3)(i) excludes a mortgage or other transfer of an interest in property merely to secure a debt.
- The real estate excise tax applies to sales of real property.
- A deed of trust or mortgage securing the loan is outside the definition of a sale.
Exception: County recording fees are separate and not covered here.
According to RCW 82.45.010, Washington State Legislature, as of October 2026.
What Washington landlord rules affect a rental property's numbers?
Washington requires a landlord to return the deposit, or give a full and specific statement of the basis for keeping any of it, within 30 days after the tenancy ends and the tenant vacates, under RCW 59.18.280.
- RCW 59.18.280(1)(a) sets the 30-day deadline and the statement requirement.
Exception: Local ordinances can add deposit rules. Check the city where the rental sits.
According to RCW 59.18.280, Washington State Legislature, as of October 2026.
Local guides for Washington: Seattle.
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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.