The Quick Read: Yes, but only indirectly: an investor asks the lender or broker to request a reconsideration of value, and better comps alone rarely move the number. The request succeeds when it shows a factual error or a specific comp problem. Opinion, projected values and a pile of extra sales do not.
- The request goes through the lender or broker, never straight to the appraiser.
- Diagnose first: did value miss, rent miss, or both? Each needs different evidence.
- Factual errors and mismatched comps are the strongest grounds. Rehab invoices help on refinances.
- A re-review can hold the value or lower it. Model the downside before filing.
- If the value holds, the fallbacks are price renegotiation, more cash, a smaller loan, a different program, or waiting.
What Does a Low DSCR Appraisal Actually Break?
It breaks one or two things. Value drives loan size through LTV. The appraiser’s market-rent opinion drives the numerator of the coverage ratio. A file can miss on either, or both at once.
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Across the wholesale network, most purchase files land at 75%-80% LTV, and cash-out refinances top out around 75% LTV. A lower value on a purchase means a smaller loan or more cash to close. On a refinance, it shrinks proceeds. A lower rent opinion cuts the coverage ratio, and 1.00 is where select programs start. Stronger ratios open better pricing and leverage. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
| What missed | What it changes | Symptom | Evidence that helps |
|---|---|---|---|
| Value | LTV and maximum loan | Loan shrinks or cash to close grows | Closed sales, subject-data corrections |
| Rent | Coverage ratio | Ratio falls even if value is fine | Leased comparable rentals |
| Both | Loan size and ratio | Leverage and coverage both slip | Two separate packets |
Fixing one does not fix the other. A rent miss needs rent comps. A value miss needs sales comps.
Can You Actually Challenge It?
You can ask for a reconsideration of value, usually called a ROV. The lender decides whether to forward it. The appraiser then reviews what was added and may revise, partly revise, or hold the original number.
The ROV is built as a lender-to-appraiser channel, which protects appraiser independence. The interagency guidance on reconsiderations of value defines it as a request from the financial institution to the appraiser to reassess the report when potential deficiencies or other information may affect the value conclusion. That is why an investor who emails comps to the appraiser often gets nowhere.
DSCR loans are business-purpose investor loans, so that guidance does not hand an investor a legal right. It describes policies regulated institutions may adopt, and it says it does not have the force and effect of law. What an investor gets depends on the lender’s own process. Across the network, those processes differ. Some lenders welcome a tidy packet. Some limit how many requests they will forward. Some prefer a second report. Ask before the appraisal is ordered.
The agency loan world has a formal borrower-initiated process. Fannie Mae’s June update to appraisers notes the ROV policy was published May 1, 2024. That framework governs agency loans only. The useful takeaway is that the industry treats an ROV as a standard step, not a hostile act.
Audit the Report Before You Argue
Start with facts, not comps. Most winnable challenges begin with a mistake in the report.
Check these in order:
- Bedroom and bathroom counts.
- Square footage and lot size.
- Basement or finished space missed or misjudged.
- Condition and quality ratings against what the photos show.
- Unit count and the unit-by-unit rent schedule on 2-4 unit properties.
- Whether the comps match the subject in location, size and style.
- Whether the adjustments make sense.
BiggerPockets’ guide to challenging a low appraisal covers the same basics: verify the facts, check that comps are similar and recent, and keep the letter specific. It is an older piece, so treat it as an evergreen checklist, not current policy.
If you find an error, document it with a deed record, floor plan, permit or measurement. Then ask for a re-evaluation. That is the cleanest ROV there is.
What Makes “Better Comps” Better?
Better comps are closer, more recent and more similar. More comps are not better. Comps must be alike in location, size, style, age and condition, and they must have sold recently.
The appraiser may not know a comp’s backstory. An unusually low sale price might reflect a distressed sale, a family transfer or a property in poor shape. Explaining that is a legitimate argument. So is pointing out that a chosen comp has a feature the subject lacks.
A BiggerPockets practitioner reply on BRRRR refinance appraisals says simply adding comps usually does not work, because exact matches are rare and the real dispute is over adjustments. It is a forum post, so read it as practitioner color. The point matches what brokers see across files: arguments about adjustments and renovation evidence land better than a longer list of sales.
| Moves the appraiser | Usually does not |
|---|---|
| A factual error in the subject data | Your own after-repair value estimate |
| A closed sale the report omitted | Asking prices or active listings |
| A comp that clearly differs from the subject | Market-trend arguments |
| Invoices tying renovation work to comps | Rehab cost alone |
| Leased comparable rentals for a rent miss | A projected or pro forma rent |
For each comp, list the neighborhood, the sale date, size, price and a one-line reason it fits. Keep the tone factual and non-accusatory.
How Do You Build the Packet, Step by Step?
Build it in order, and keep it short.
1. Get the complete report. That means the appraisal, the rent schedule and any addenda. Form 1007 is the single-family comparable rent schedule, and Form 1025 covers 2-4 units.
2. Diagnose the miss. Decide whether value, rent or both came in low. Write down what each would change in the file.
3. Fix factual errors first. Attach proof for each one.
4. Select a handful of closed comps. Pick the closest and most recent, and explain each in one line.
5. Challenge specific adjustments. Name the adjustment, say why it looks off, and show what comps support instead.
6. Add renovation proof on a refinance. A documented scope and invoices tie the work to the comps. Renovated sales help most because they point the appraiser at updated properties.
7. Submit through the lender or broker. Send a clean, numbered cover note, each item tied to a document.
8. Re-run the file at the new figure. Check loan size, cash to close and the coverage ratio before you decide anything else.
Outcomes and turnaround vary by lender and appraiser. No reliable public figure exists on success rates, so plan for either result.
When the Problem Is Rent, Not Value
A rent miss needs leased comparables, not sales. The appraiser’s market-rent opinion is built on what similar units actually rented for, so asking rents and trend talk do not carry weight.
Many programs credit the lower of the lease and the market rent. A high lease does not automatically lift the figure, and a low lease can cap it. Specifics differ by lender, so confirm how the program treats leases before you lean on one. On a vacant property, the appraiser’s opinion is the only rent number in the file.
Short-term rentals carry their own wrinkle. Form 1007 is built for long-term monthly rent. Class Valuation explains that the form does not capture nightly pricing or seasonal occupancy. A low 1007 can therefore drag down coverage on an STR even when bookings are strong. In that case the fix is usually the lender’s separate STR income documentation, not a comp challenge. Network STR programs expect about 12 months of hosting history and a 640+ score, with purchase leverage to 75% LTV.
What Does a Win, a Partial Win and a Loss Look Like?
Run all three branches before you file. The examples below are illustrative, not quotes.
Win. Say a purchase comes in low on value and the review restores it. Loan size returns toward the original target at the same LTV. Rent did not change, but the larger loan carries a larger payment, so coverage slips a little even on a full win. A file that sat comfortably above 1.2x may still clear that mark after the slip.
Partial win. The appraiser restores part of the value. The loan grows, but the investor still brings more cash than planned. Run the ratio again. A larger loan raises the payment, so coverage can slip, though by less than on a full win.
Loss. The value holds or drops. On a purchase, the investor chooses among more cash, a smaller loan or renegotiation. On a refinance, the draw shrinks.
Here is the two-sided effect people miss. Winning the value argument can raise the loan amount, and a bigger loan lowers coverage. On a file already near 1.00, check both numbers before filing. Also remember what the ratio measures. DSCR compares rent to PITIA only. Clearing 1.00 is not positive cash flow, since repairs, vacancy, management, utilities and capex sit outside it.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Should You File at All?
File when you have a documented error, an omitted sale, or a clear comp mismatch that moves a number the file needs. Skip it when the gap is small, the evidence is opinion, or the file still fails after a win.
Don’t challenge when:
- Your only argument is your own projected value or rent.
- A full win would still leave coverage or LTV outside the program.
- The property is rural or unusual, with so few comps that the appraiser has little data to adjust from.
- The deadline in your contract leaves no room for a review.
A re-review can also hold the value or lower it. An investor post on BiggerPockets about an unexpected low appraisal describes a dispute where the report changed but the opinion of value did not. That is one investor’s anecdote, but it fits the pattern. Lendmire’s piece Can You Challenge a Low Appraisal on a DSCR Refinance for Better Terms? covers the refinance side in more depth.
If the Value Holds: The Fallback Ladder
Work down this ladder. Each rung has a cost.
| Option | Tradeoff | When it fits |
|---|---|---|
| Renegotiate price (purchase) | Seller must agree | Contract leaves room |
| Bring more cash | Ties up capital | Coverage still clears |
| Take a smaller loan or draw | Less proceeds | Refinance with flexible goals |
| Restructure the loan | Terms change | Ratio is the binding limit |
| Different program or lender | New review | Another lender’s rules fit better |
| Wait and re-apply (refinance) | Delays the plan | Value is likely to improve |
| Walk away | Risk of losing the deposit | Numbers fail even after changes |
A second appraisal is not a do-over. The lender decides which value governs, and it is often the lower one. Value-shopping is not allowed, and a new report is a gamble. A larger down payment lowers the payment and can lift coverage, but it never erases leverage caps, credit floors, reserve rules or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Watch the contract and lock deadlines. Ask about appraisal contingencies and any fee for a second report before you commit.
How Do You Prevent the Problem Next Time?
Pull your own comps before the appraisal is ordered. Gather recent closed sales and leased rentals for similar properties. Treat any pre-appraisal coverage number as an estimate and leave a cushion.
Ask these questions up front:
- What is the lender’s ROV process, and how many requests will it forward?
- Does the program use the lower of lease and market rent?
- What happens if a second appraisal is needed, and who pays?
- Which deadlines does the contract set?
Reserves matter on the other side of the file. They vary by lender, leverage, loan size and transaction type. About 6 months of PITIA is common, and loans above $1,500,000 typically step up to about 9 months. Typical network guidance runs from a 620 floor in parts of the network to 700+ for the strongest leverage tiers, subject to lender guidelines. For the full program picture, see Lendmire’s complete DSCR loans guide.
Common Mistakes
- Sending comps straight to the appraiser instead of through the lender.
- Treating the federal ROV guidance as a legal right on a DSCR loan.
- Submitting a long list instead of a short, specific packet.
- Using asking rents or listings as proof.
- Assuming rehab spending adds value automatically. The appraiser’s adjustments govern.
- Filing without modeling the downside.
- Fixing a value problem when rent is the real miss.
Key Terms Defined
Reconsideration of value (ROV): A request, routed through the lender, asking the appraiser to reassess a report.
Comparable (comp): A recently sold or leased property similar to the subject, used to support value or rent.
Form 1007: The single-family comparable rent schedule an appraiser uses to give a market-rent opinion.
Form 1025: The small-income-property report for 2-4 units, with a unit-by-unit rent schedule.
DSCR: The rent-to-PITIA ratio used to qualify a rental property.
Adjustment: A dollar change the appraiser applies to a comp to account for differences from the subject.
Frequently Asked Questions
Can I contact the appraiser directly with my comps?
Not through the usual channel. The ROV is a lender-to-appraiser request, which protects appraiser independence. Send your packet to the lender or broker and let them decide how to forward it.
Does a higher lease help if the appraiser’s rent is low?
Often not. Many programs credit the lower of the lease and the market rent, so a lease above the appraiser’s number may not lift the ratio. Confirm how the specific program treats leases.
How many comps should I submit?
Fewer, better ones. A short set of closely matched closed sales, each with a one-line reason, beats a long list. Some lenders cap how many they will forward, so ask first.
Does a challenge guarantee a revision?
No. The appraiser may revise, partly revise or hold the original figure, and a re-review can sometimes lower it. Lender policy controls the process.
Does this work for rent as well as value?
Yes, but with different evidence. Rent challenges need leased comparable rentals, not sales. Short-term rental income usually runs through separate lender documentation instead.
Next Step
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Lendmire is a broker arranging DSCR investor loans through select lenders in its wholesale network, across 41 markets including Washington, D.C. Tax treatment varies; consult a qualified professional.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage brokerage specializing in DSCR investor loans, helping arrange financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. The model centers on property-level rental income reviewed by the lender rather than W-2 documentation, subject to lender guidelines, suiting entity-owned and multi-property investors. Lendmire holds Scotsman Guide Top Mortgage Workplace recognition for 2025 and 2026.
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References
2. Fannie Mae Appraiser Update, June 2024
3. BiggerPockets: Challenging a Low Appraisal
4. BiggerPockets Forum: Low Appraisal for BRRRR Refi
5. Class Valuation: Form 1007 and Short-Term Rentals
6. BiggerPockets: Unexpected Low Appraisal
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR Co-Living Rules for a W-2 Investor at the Conventional Cap · Investor Cash-Out Refinance Appraisal Shortfall for a BRRRR Rehab · DSCR Seller-Carry Second Requirements for a Purchase
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.