1031 Exchange Financing: Using a DSCR Loan to Complete Your Exchange
A 1031 exchange lets investors defer capital gains tax by rolling proceeds from a sold property into a new one — but that only works if your replacement financing closes on time. DSCR loans are increasingly the tool investors use to make sure it does.
This is general information, not tax advice — always confirm 1031 exchange rules and timelines with a qualified intermediary and CPA.
Why financing speed matters in a 1031
A 1031 exchange runs on strict IRS deadlines: 45 days to identify a replacement property, and 180 days to close on it. Conventional financing, with full income documentation and longer underwriting timelines, can put that deadline at risk — especially if your personal income file is complex.
Why DSCR loans fit well here
Because DSCR underwriting qualifies the replacement property on its own rental income rather than requiring tax returns and W-2s, files often move faster through underwriting, which helps protect your 180-day closing window.
What to line up in advance
Because timelines are tight, get pre-qualified for DSCR financing before you're deep into your 45-day identification window, so your financing plan is ready to move the moment you identify a replacement property.
Working on a 1031 timeline?
Let's get your DSCR financing pre-qualified before your identification window closes.
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