The Quick Read: It depends on the file, because a filed but unheard eviction does not automatically block a DSCR loan, but it does cast doubt on whether the rent on paper is really being paid, and that doubt is what a lender has to resolve. The answer turns on the transaction type, how the case stands, and which rent figure the lender can rely on.
- A filing starts a court case. It does not remove the tenant or change the lease.
- DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
- Lenders commonly count the lower of the lease rent and the appraiser’s market rent.
- A tenant who has stopped paying weakens the lease-and-payment-history proof, so some lenders fall back to market rent and others pause the file.
- Purchases of vacant or soon-to-be-vacant units are usually easier than refinances of occupied units with an open dispute.
The rest of this piece explains how each of those points plays out and what you can do about them.
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Which Eviction Do You Mean?
This article covers a landlord who has filed an eviction against a tenant in a property they own or want to finance. It does not cover a borrower who is personally facing eviction from a home. That is a different problem with a different answer.
The landlord version splits into three common situations:
- You own the property and want to refinance or pull cash out while a case is open.
- You are buying a property where the seller has a case open against the occupant.
- You own several properties and one has a tenant dispute, which matters if you want them all under one loan.
Each situation leads to a different underwriting path, so keep yours in mind as you read.
How a Lender Reads a Pending Case
A DSCR lender asks one core question: does the rent cover the monthly payment? The payment here means PITIA, which is principal, interest, taxes, insurance, and any association dues. The ratio is monthly rent divided by that payment.
Across the wholesale network Lendmire works with, the rent used in that math is commonly the lower of two numbers: the rent in the lease and the market rent the appraiser opines. When the property is vacant, market rent stands alone. A lease usually needs support, such as recent bank statements showing the rent actually landing in the owner’s account.
Here is why a filed eviction matters. A lease says the tenant owes a certain rent. The bank statements show whether the tenant pays it. When the tenant stops paying, those two documents disagree, and the filing is public proof of the gap.
That does not mean automatic denial. It means the lender has to choose a rent basis it trusts. Some lenders will fall back to the appraiser’s market rent and run the ratio from there. Others will want the case resolved first. A few will decline. No universal rule governs this, so each lender decides for itself, based on its own policy on pending disputes.
The appraiser’s rent opinion is the fallback. The appraisal form for a one-unit rental, Fannie Mae’s Form 1007, exists so a lender can get market rent for a single-family investment property from the appraiser. Only the form is borrowed here. DSCR loans are not agency loans, and agency selling rules do not govern them.
What “Filed but Not Heard” Actually Means
Filing is early in the process. A landlord ends the tenancy with a notice, files a complaint, and serves the tenant. Then the tenant gets a window to respond, and a hearing is set. A judge has ruled on nothing at that point.
Timing varies a lot by state. The Texas State Law Library explains that a Texas hearing is set no sooner than 10 days after filing and no later than 21. That is one state’s rule, offered as an example. Other states run longer or shorter.
Real-world timing varies even more. Hemlane, a property-management company, analyzed 8,335 cases in its own dataset. It found that about 98% resolved administratively in roughly six days, while the cases that reached court typically took two to five months. Treat that as one company’s data, not a national benchmark. The takeaway is that filed can mean days or many months.
Even a judgment for possession is not removal. It is a court order. A writ of possession and enforcement by a sheriff or similar officer come after it. So a filing, a hearing, a judgment, and an empty unit are four separate milestones.
The Stage-by-Stage Picture
This table shows how a lender may reason at each stage. It is a general guide, not a published rule, and it is subject to lender guidelines.
| Case stage | Likely rent basis | Key document | Your move |
|---|---|---|---|
| Filed, not heard | Uncertain; often market rent | Notice, court filing | Disclose; ask lender’s policy |
| Hearing scheduled | Market rent if lender proceeds | Docket, rent ledger | Decide whether to wait |
| Judgment, tenant in unit | Market rent; many pause | Judgment, writ status | Wait for possession |
| Tenant vacated | Market rent (vacant file) | Proof of possession | Prepare unit for appraisal |
| Dismissed or paid up | Lease plus payment history | Updated ledger | Reapply as a normal file |
The filed-but-not-heard row is the hardest to underwrite. Nobody knows the outcome yet, so the lender cannot tell whether the unit will be occupied, vacant, or in dispute at closing.
Purchase, Refinance, or Cash-Out?
The transaction type changes the answer more than almost anything else.
| Transaction | How a pending case tends to land |
|---|---|
| Purchase of a vacant or soon-vacant unit | Often workable on market rent |
| Purchase with occupant still in dispute | Depends on delivery condition |
| Rate-and-term refinance, occupied | Lease and payment history weaken |
| Cash-out refinance, occupied | Strictest; many lenders pause |
On a purchase, the usual DSCR route for a vacant property is market rent from the appraisal. The open questions are whether the occupant leaves before closing and whether the property is delivered vacant. A purchase contract can often be structured around that delivery condition.
A refinance of an occupied property leans harder on the lease and payment history. That is exactly where a filed eviction does the most damage. Cash-out files tend to draw the most scrutiny because the lender is advancing more money against the same property.
On a purchase, most files across the network land at 75%-80% LTV. LTV means loan-to-value, the loan amount as a share of the property’s value. On a cash-out refinance, most standard-rental programs top out around 75% LTV. Those leverage caps stay in place regardless of the eviction question, and a lender may adjust leverage further if it sees added risk. Every figure here is a typical range, subject to lender guidelines.
A Worked Example
Run the numbers on this modeled scenario. Assume a duplex with an occupied unit where the lease rent would support a coverage ratio of roughly 1.25x. The tenant has stopped paying and the landlord has filed. The appraiser’s market rent for the same unit supports roughly 1.05x.
- A lender that trusts the lease might use the 1.25x figure. The missed rent makes that difficult.
- A lender using the lower-of rule lands at roughly 1.05x on market rent.
- Coverage of 1.00 is where many select programs start, so 1.05x may clear a program minimum, though it leaves little room.
- A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
These ratios are modeled assumptions, not market data. They show why the rent basis matters. The same property can look strong or thin depending on which rent the lender can defend.
Clearing the minimum also does not mean the property is cash-flowing. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital costs sit outside it. A unit with a non-paying tenant is a good reminder, because the ratio can look fine while actual collections are zero.
Key Terms Defined
- DSCR: debt service coverage ratio, which compares a property’s rent used for lender review to its monthly payment.
- PITIA: principal, interest, taxes, insurance, and association dues, which together form the monthly payment in the ratio.
- Market rent: the rent an appraiser estimates the unit would earn from a new tenant, based on comparable rentals.
- LTV: loan-to-value, the loan amount divided by the property’s value.
- Judgment for possession: a court order saying the landlord may recover the unit. It is not the same as the tenant leaving.
- Writ of possession: the order that lets an officer enforce removal after a judgment.
Wait, Apply, or Restructure?
Your best move depends on where you sit. Here are the main options and the tradeoffs.
Wait until the case resolves. This is the cleanest path. Once the tenant cures, leaves, or is removed, the file reverts to a normal paying-tenant file or a vacant-property file. The cost is time, and you carry the unit meanwhile.
Choose a transaction where market rent is the basis. A vacant-property purchase or a refinance after the unit empties lets the appraiser’s rent stand alone. A non-paying tenant no longer drags down a lease you cannot support.
Keep the unit out of a pooled loan. Some investors want several properties under one note. A problem unit can then affect the whole loan. Pooled coverage is generally tested together, so one weak unit does not always sink the pool, but you may do better to finance the clean properties first.
Apply now and disclose. Some lenders will review a file with an open case, especially on a purchase. This works only if you tell the loan officer at the start and let the lender decide.
A contested case can run for months. If you are timing a refinance or purchase around a deadline, plan for the case staying open longer than you expect. A tenant’s bankruptcy filing can also pause a case, which extends the unresolved state further.
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.
Appraisal Access Can Slow Things Down
The appraiser needs to see the unit. For a one-unit property, the appraiser completes a market rent schedule. For a two- to four-unit property, the appraisal report includes an operating income statement, and Fannie Mae’s selling guide forms list names both forms, 1007 and 1025. A tenant in dispute may refuse entry. That can delay or complicate the appraisal even when the rent math would work. Plan for it, and raise it early with your loan officer.
What to Gather and What to Disclose
Expect to produce documents like these if you want a lender to evaluate a file with an open case:
- the lease and any amendments
- the rent ledger and recent bank statements
- the termination notice served on the tenant
- the court filing or docket
- the appraisal with its rent schedule
- a short written explanation from you
Disclose the case early and in full. Court filings are public records, and title and litigation reviews can surface them. A lender that finds an undisclosed dispute mid-file may lose trust in the rest of your documents. A lender that hears about it upfront can tell you honestly whether its program fits.
Other underwriting gates stay in place whatever happens with the tenant. Most programs across the network want a credit score around 660, with a 620 floor in parts of the network and 700 or better unlocking the strongest leverage tiers. Reserves commonly run about six months of PITIA, stepping up to about nine months on loans above $1,500,000. Standard programs go up to $3,000,000. Those are typical ranges, and every file is reviewed individually.
Do Not Take Shortcuts With the Tenant
Do not change the locks, remove belongings, or shut off utilities to clear the unit before an appraisal. Nolo explains that lockouts and utility shutoffs are illegal, and that the lawful route runs through notice, suit, and a court order. A self-help removal creates legal liability for you and a messy paper trail for the lender.
Procedures differ by state, so a local landlord-tenant attorney is the right person for questions about notice rules, response windows, and timelines.
Common Misconceptions
A filed eviction means automatic denial. No fixed rule says so. The rent basis, the transaction type, and the lender’s own policy decide it.
A signed lease is enough. Lease rent is generally capped at market rent, and lenders want proof the rent is paid.
A filing means the tenant is already out. It starts a case. Possession comes only after judgment, a writ, and enforcement.
DSCR loans follow agency eviction rules. They do not. Only the appraisal form names overlap.
Frequently Asked Questions
Can I refinance a rental while an eviction case is open?
Sometimes, but it is the harder path. A refinance of an occupied property relies on the lease and payment history, and a non-paying tenant weakens both. Some lenders will use market rent, some will wait for resolution, and some will decline. Ask a broker which lenders in the network will review it before you pay for an appraisal.
Will a DSCR lender use market rent instead of my lease?
Often, yes. Many programs use the lower of the lease rent and the appraiser’s market rent. If the unit is vacant, market rent alone is used. A month-to-month or expired lease usually falls back to market rent with the lease as support.
Does the filing hurt my own credit?
Generally not directly. An eviction case is typically a court record about the tenant, not the owner. Your credit score still matters for the loan, and your own payment history on the mortgage and other debts is reviewed as usual.
Can I buy a property that has an eviction pending against the occupant?
It can be possible, particularly if the property will be delivered vacant. The purchase is usually underwritten on market rent from the appraisal. Purchase leverage typically runs 75%-80% LTV on an investment property, subject to lender guidelines. The main risk is whether the occupant leaves before closing, so the contract should address delivery condition.
What if coverage lands below 1.00 on market rent?
Coverage of 1.00 is where many select programs start. A separate path through select lenders in the network takes coverage below 1.00, with leverage and terms adjusted. A larger down payment can lift the ratio by lowering the payment, but it does not erase credit floors, reserve rules, or property eligibility.
The Bottom Line
A filed but unheard eviction puts a file into a gray zone. The case is real, the outcome is unknown, and the lender must decide which rent it believes. Your best leverage is clarity: know where the case stands, choose a transaction where market rent carries the file, and disclose early. For the full picture of how these loans work, see Lendmire’s complete DSCR loans guide.
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. As a broker, it arranges financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Programs are subject to lender guidelines and this is not a commitment to lend.
A case that has been filed but not heard is a temporary state, and the investors who plan around that, rather than hoping it disappears, tend to have the cleaner next file.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Form 1007 instructions
2. Texas State Law Library eviction guide
3. Hemlane eviction timing data
4. Nolo, Don’t Lock Out a Tenant
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get a DSCR Loan After a Short Sale or a Lost Rental? · How to Refinance the Home You Moved Out of With a DSCR Loan · How Much More Documentation a Bank Loan Needs Than DSCR
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.