Sober Living DSCR Loans
Sober living homes generate strong rental income per bed — but most lenders don't know how to underwrite them. We accept separate leases as income verification and qualify the loan on the property's actual cash flow, not your personal tax returns.
Start Your ApplicationHow Sober Living DSCR Underwriting Works
Sober living homes — also called recovery residences or sober houses — operate as shared housing for individuals in recovery. Residents sign individual leases and pay rent separately, which means the property generates income from multiple tenants under one roof. That structure is a natural fit for DSCR lending.
The property's combined rental income from all separate leases is used to calculate the DSCR ratio. As long as the income covers the debt service, the loan qualifies — no W-2s, no tax returns, no personal income verification required. The property pays for itself.
This program is available for 1–4 unit properties in residential zoning only — it is not a commercial loan product. That matters because most sober living homes are standard residential properties operating under a group home model, which fits squarely within this program's guidelines.
Program Highlights
- Separate leases accepted as income verification
- Purchase & rate/term refi up to 80% LTV
- Cash-out refinance up to 75% LTV
- Minimum 660 credit score
- LLC and entity vesting welcome
- 1–4 unit residential zoning only
- Loan amounts from $150,000 to $2,000,000
- Available in many states nationwide
- No personal tax returns required
- Income from property qualifies the DSCR ratio
Why Separate Leases Matter
In a traditional rental, one tenant signs one lease for the whole property. In a sober living home, each resident has their own agreement — and many lenders don't know what to do with that structure. They either reject the application outright or can't properly verify the income.
This program was built for exactly that scenario. Separate leases are accepted as income documentation, so the full revenue of the property is recognized — not just one tenant's portion. That means your DSCR ratio reflects the property's actual earning power.
Loan Terms Available
You have flexibility depending on your investment strategy:
Stable payment, fully amortizing over 30 years — the most straightforward structure for long-term hold investors.
Lower monthly payment than a 30-year, fully amortizing over 40 years — improves cash flow and DSCR ratio on tighter deals.
Interest-only payments for the first 10 years, then converts to the same fixed rate for the remaining 20 years — maximizes early cash flow.
Prepayment Penalty Options
Prepayment penalties are available in 1- to 5-year terms, calculated as six months' interest on 80% of the outstanding balance. You choose the term that matches your exit strategy — shorter if you plan to sell or refinance soon, longer if you're holding and want a lower rate in exchange.
Who This Loan Is For
This program is a strong fit for investors who:
- Own or are purchasing a sober living or recovery residence
- Are structured as an LLC or other entity
- Want to qualify on the property's income rather than their personal finances
- Are growing a portfolio and need a scalable financing solution
- Have been turned away by conventional lenders unfamiliar with this property type
Because this is a residential DSCR loan, it fits cleanly within a portfolio strategy — you can stack multiple properties under separate LLCs without the income documentation complexity of conventional financing.
Loan Parameters at a Glance
Ready to Finance Your Sober Living Investment?
Speak directly with Patrick Penner — a DSCR specialist with experience financing specialty residential properties that conventional lenders turn away.