Long-Term Rental (LTR)
What is a Long-Term Rental?
A property leased on a monthly basis or longer — typically under a 12-month written lease.
A long-term rental (LTR) is the classic landlord scenario: a tenant signs a written lease — almost always for at least 12 months — and pays a fixed monthly rent. The property is occupied by the same household for the full lease term, with renewals extending the relationship.
Compared to short-term rentals, long-term rentals produce lower gross rents per square foot but have substantially lower operating expenses — no per-stay cleaning, no platform commissions, no nightly turnover. Vacancy tends to be lower as well, since each unit only re-leases once per year at most.
For investor lending, the LTR rent is generally a known, stable number, which makes DSCR underwriting straightforward: take the lease amount or the appraiser’s market-rent estimate, divide by PITIA, and you have your ratio.
How Long-Term Rentals work at Total Quality Lending
On a Total Quality Lending DSCR loan for a long-term rental, the qualifying rent is the lower of (a) the appraiser’s estimated market rent from FNMA Form 1007 (single-family) or Form 1025 (2-4 unit small income property), and (b) the actual lease in place. This conservative standard means TQL won’t pretend a property earns more than the market can actually support.
When a tenant’s lease is above market rent, TQL will accept the higher number if it’s within 120% of market rent and the borrower can show two months of receipts proving the tenant has been paying it. For multi-unit DSCR loans (5–8 unit residential or 2–8 unit mixed-use), the same approach applies on a per-unit basis, with separate vacancy and commercial-unit rules layered on top.