What is the difference between a term sheet and a clear-to-close?

A term sheet is an early, conditional proposal; a clear-to-close means every underwriting condition has been satisfied and closing can be scheduled.

Can the rate change between the term sheet and closing?

It can, if the DSCR, LTV, credit or prepayment option changes once the appraisal and verifications come in. It is priced to the file, not fixed at application.

What usually causes delay?

Slow document returns and appraisal scheduling are the two most common causes, followed by title issues on the property itself.

Do I need to be present at closing?

You sign the closing package, in person or via remote notarisation depending on the state and the title company; arrangements vary by lender and jurisdiction.

When does the loan actually fund?

Funding is when the wire is sent and escrow disburses, which can be the same day as signing or the following business day depending on wire cut-off times.

LESSON 1 OF 64 MIN READ

What are the stages from application to funding on a DSCR loan?

A DSCR file moves through a fixed sequence: application, a term sheet setting the proposed terms, processing and document collection, underwriting, conditions, a clear-to-close, closing, and funding. Each stage has a gatekeeper and a set of open items, and the file cannot advance until those items close. On Silt's sheet the whole path typically runs 21 to 30 days from a signed term sheet, with the appraisal usually the pacing item rather than underwriting itself. Knowing the sequence in advance is the single best way to keep your own paperwork from becoming the bottleneck.

THE NUMBERS

Minimum DSCR	0.75 (0.75–0.99 prices at +62.5 bps, 70% LTV cap)
Maximum LTV	80% purchase or rate-and-term · 75% cash-out
FICO floor	660 (below that the desk does not lend)
Loan size	$100K – $3M single · $10M portfolio
Reserves	6 months PITIA · 12 months on a portfolio
Prepay options	5-4-3-2-1 par · 3-2-1 +25 bps · 1-yr +50 bps · none +87.5 bps
Typical days to close	21–30 days from a signed term sheet
Rate sheet	Silt Rate Desk — Market Composite Sept 2026 · effective 2026-09-01

ILLUSTRATIVE — published program floors, not a quote or a commitment to lend. Subject to underwriting, appraisal and final credit approval.

Application and the term sheet

The file opens with a short application covering the property, the entity, the borrower's credit and the requested loan amount and structure. The desk returns a term sheet quoting an indicative rate, LTV, DSCR band and prepayment option based on the information given. It is a proposal, not a promise — it is subject to appraisal, title, and verification of everything stated, and the numbers can move if any of those come back different from the application.

Processing and document collection

Once you sign the term sheet, a processor opens the file and orders the appraisal, title search and any insurance quote needed, while collecting entity documents, the lease or rent evidence, bank statements for reserves, and the purchase contract or payoff statement. This stage lives or dies on how quickly you return complete documents; a half-answered request queues behind other files and adds days for no underwriting reason at all.

Underwriting

The underwriter reviews the completed file against the guideline: DSCR against the floor, LTV against the cap, credit against the 660 floor, reserves against the six-month PITIA requirement, and the appraisal and title against the property itself. The output is either an approval with conditions or, rarely, a decline — most files land somewhere in between, needing a document, a clarification, or an updated number before they can move forward.

Conditions and the clear-to-close

Conditions are the specific items the underwriter needs before funding: an updated insurance binder, a payoff good-through date, an LLC operating agreement page that was missing a signature. Clearing them promptly is entirely within your control, and it is the stage where most preventable delay lives. Once every condition clears, the file receives a clear-to-close, and closing can be scheduled.

Closing and funding

At closing you sign the note, the security instrument and the closing disclosure package with a title or escrow agent. Funds move by wire from the lender to escrow, escrow disburses to the seller or the payoff lender, and the deed or mortgage is sent for recording. Funding is the moment money actually moves, and it can happen the same day as signing or the next business day depending on wire cut-off times and the title company's process.

What actually sets the pace?

In practice the appraisal is the longest single item on most files, because it depends on an outside appraiser's schedule rather than the lender's. Title work and an insurance binder can also stall a file if the property has an open lien, a name discrepancy, or a lapsed policy. The fastest files are the ones where the borrower's documents are complete on day one, leaving the appraisal as the only clock still running.

A file's timeline, start to finish

Day 0	Application submitted
Day 1–2	Term sheet issued and signed
Day 3	Appraisal and title ordered; documents requested
Day 10–14	Appraisal returned
Day 12–16	Title commitment and insurance binder in file
Day 15–18	Underwriting decision with conditions
Day 18–22	Conditions cleared
Day 22–25	Clear-to-close issued
Day 25–30	Closing and funding

Illustrative sequence only — actual dates depend on the appraiser's schedule, title findings and how quickly conditions are returned.

WHAT WE NEED FROM YOU

Entity documents. Articles or certificate of formation, operating agreement, EIN letter.
Lease or rent evidence. A signed lease, or the appraiser's rent schedule if vacant.
Two months of bank statements. Evidencing the required six months of PITIA in reserves.
Insurance binder. Naming the entity, ordered early so it is not the last item to clear.
Purchase contract or payoff statement. Whichever applies, with any amendments attached.

FREQUENT QUESTIONS

What is the difference between a term sheet and a clear-to-close?: A term sheet is an early, conditional proposal; a clear-to-close means every underwriting condition has been satisfied and closing can be scheduled.
Can the rate change between the term sheet and closing?: It can, if the DSCR, LTV, credit or prepayment option changes once the appraisal and verifications come in. It is priced to the file, not fixed at application.
What usually causes delay?: Slow document returns and appraisal scheduling are the two most common causes, followed by title issues on the property itself.
Do I need to be present at closing?: You sign the closing package, in person or via remote notarisation depending on the state and the title company; arrangements vary by lender and jurisdiction.
When does the loan actually fund?: Funding is when the wire is sent and escrow disburses, which can be the same day as signing or the following business day depending on wire cut-off times.

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