--- title: "DSCR Loans for Assisted Living Homes: 4 Things You Need" description: "Buying an assisted living or residential care home to lease to an operator? A DSCR loan turns on 4 things: the operator, the income, the appraisal and equity." --- Surest Capital Company · NMLS #2640412 · Business-Purpose LendingRequest a loan: [(213) 867-4223](tel:+12138674223) [**Surest Capital**Commercial Real Estate Finance](https://surestcapital.com/) [Home](https://surestcapital.com/) [Loan Services](https://surestcapital.com/commercial_real_estate_loans) [Non-QM](https://surestcapital.com/non-qm) [ALF/RCFE](https://surestcapital.com/alf-rcfe-loans) [Knowledge](https://surestcapital.com/knowledge) [About](https://surestcapital.com/about-us-1) [Contact](https://surestcapital.com/contact-us) [Brokers](https://surestcapital.com/brokers) [Originate](https://surestcapital.com/originate) [Submit a scenario](https://surestcapital.com/alf-rcfe-loans#scenario) ALF Financing # 4 Things You Need to Finance an Assisted Living Home on Its Potential Income Brian D. Nichols · November 9, 2026 You can buy a care home and qualify for the loan on the property's potential income, not on your tax returns. That is a DSCR loan, and on an assisted living or residential care home it turns on four things: 1. **A licensed operator and a signed lease.** 2. **Income the property can support.** 3. **An appraisal of the real estate.** 4. **Equity and the right owner.** This is the investor path from our guide, [How to Finance an Assisted Living or Residential Care Home](https://surestcapital.com/alf-financing/how-to-finance-assisted-living-residential-care-home). ## 1. A licensed operator and a signed lease The operator who leases the home is where its income comes from, so the license and the lease are the first documents to line up. - **The tenant holds the license.** The operator should hold, or be applying for, the state license for this address. Ask for a copy and check its capacity. Each state uses its own license name; see the table in our [guide](https://surestcapital.com/alf-financing/how-to-finance-assisted-living-residential-care-home). - **The lease is signed and complete.** Monthly rent, term, renewal options, and who pays taxes, insurance and repairs. Write license upkeep into it: the tenant keeps the license in good standing and tells you about any license action. - **The license survives your purchase.** Licenses often do not move with a sale. In California, an RCFE license is forfeited when the licensee sells or otherwise transfers the facility or the facility property ([Cal. Health & Safety Code 1569.19](https://codes.findlaw.com/ca/health-and-safety-code/hsc-sect-1569-19/)). If your seller is also the operator, confirm with the state licensing office how the license continues before you sign. ## 2. Income the property can support The loan qualifies on the property's potential income, not on your personal income. Bring what shows it: the lease, the operator's license and, if the home is already operating, proof the rent is being paid. ## 3. An appraisal of the real estate The appraiser values the real estate, and the loan is sized on that value. - **Describe the care use.** Have the lease, the license and the operator's payment history ready for the appraisal so the property is described accurately. - **Only the real estate supports this loan.** When a sale includes the operation, appraisers of senior housing allocate value among the real property, the furniture and equipment, and the business itself ([Appraisal Institute](https://appraisalinstitute.org/insights-and-resources/resources/books/the-appraisal-of-senior-housing-nursing-home-and-hospital-properties)). The business is financed another way; see SBA in our [guide](https://surestcapital.com/alf-financing/how-to-finance-assisted-living-residential-care-home). ## 4. Equity and the right owner - **Equity.** Surest Capital's care-home program lends up to $3 million at up to 65 percent loan-to-value; terms vary by scenario. Plan on at least 35 percent of the price down, plus closing costs. - **Reserves.** Plan to keep cash in reserve after closing. We'll tell you how much for your scenario. - **How you'll hold title.** Decide whether you'll buy in your own name or through an LLC or corporation, and tell us up front. - **Business purpose only.** Federal rules treat a loan on rental property the owner does not live in as business credit. Plan to live there more than 14 days in the coming year and that changes ([12 CFR 1026.3, comment 3(a)-4](https://consumerfinance.gov/rules-policy/regulations/1026/3)). If you or your family will live in the home, this is not the right loan. ### Sources - [How to Finance an Assisted Living or Residential Care Home](https://surestcapital.com/alf-financing/how-to-finance-assisted-living-residential-care-home), Surest Capital - [The Appraisal of Senior Housing, Nursing Home, and Hospital Properties](https://appraisalinstitute.org/insights-and-resources/resources/books/the-appraisal-of-senior-housing-nursing-home-and-hospital-properties), Appraisal Institute - [California Health and Safety Code 1569.19](https://codes.findlaw.com/ca/health-and-safety-code/hsc-sect-1569-19/), FindLaw - [12 CFR 1026.3 and Official Interpretation 3(a)-4](https://consumerfinance.gov/rules-policy/regulations/1026/3), Consumer Financial Protection Bureau Educational information, not legal, tax, or financial advice. All financing is subject to underwriting and approval. Business-purpose loans only. Surest Capital Company · NMLS #2640412 ## Have a care-home deal? Submit a scenario: property type, location, loan amount, and goal. No application, no credit pull, no obligation. [Submit a scenario](https://surestcapital.com/alf-rcfe-loans#scenario)[Become a broker partner](https://surestcapital.com/brokers) #### Surest Capital Company A business-purpose lender. Surest Capital funds DSCR, non-QM, bridge, renovation and construction loans, and arranges SBA and agency financing through lending partners. 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