diff --git a/openssh-8.7p1-recursive-scp.patch b/openssh-8.7p1-recursive-scp.patch
new file mode 100644
index 0000000..98ca843
--- /dev/null
+++ b/openssh-8.7p1-recursive-scp.patch
@@ -0,0 +1,173 @@
+diff -up openssh-8.7p1/scp.c.scp-sftpdirs openssh-8.7p1/scp.c
+--- openssh-8.7p1/scp.c.scp-sftpdirs	2022-02-07 12:31:07.407740407 +0100
++++ openssh-8.7p1/scp.c	2022-02-07 12:31:07.409740424 +0100
+@@ -1324,7 +1324,7 @@ source_sftp(int argc, char *src, char *t
+ 
+ 	if (src_is_dir && iamrecursive) {
+ 		if (upload_dir(conn, src, abs_dst, pflag,
+-		    SFTP_PROGRESS_ONLY, 0, 0, 1) != 0) {
++		    SFTP_PROGRESS_ONLY, 0, 0, 1, 1) != 0) {
+ 			error("failed to upload directory %s to %s",
+ 				src, abs_dst);
+ 			errs = 1;
+diff -up openssh-8.7p1/sftp-client.c.scp-sftpdirs openssh-8.7p1/sftp-client.c
+--- openssh-8.7p1/sftp-client.c.scp-sftpdirs	2021-08-20 06:03:49.000000000 +0200
++++ openssh-8.7p1/sftp-client.c	2022-02-07 12:47:59.117516131 +0100
+@@ -971,7 +971,7 @@ do_fsetstat(struct sftp_conn *conn, cons
+ 
+ /* Implements both the realpath and expand-path operations */
+ static char *
+-do_realpath_expand(struct sftp_conn *conn, const char *path, int expand)
++do_realpath_expand(struct sftp_conn *conn, const char *path, int expand, int create_dir)
+ {
+ 	struct sshbuf *msg;
+ 	u_int expected_id, count, id;
+@@ -1012,9 +1012,37 @@ do_realpath_expand(struct sftp_conn *con
+ 
+ 		if ((r = sshbuf_get_u32(msg, &status)) != 0)
+ 			fatal_fr(r, "parse status");
+-		error("Couldn't canonicalize: %s", fx2txt(status));
+-		sshbuf_free(msg);
+-		return NULL;
++		if ((status == SSH2_FX_NO_SUCH_FILE) && create_dir)  {
++			if ((r = do_mkdir(conn, path, &a, 0)) != 0) {
++				sshbuf_free(msg);
++				return NULL;
++			}
++
++			send_string_request(conn, id, SSH2_FXP_REALPATH,
++					path, strlen(path));
++
++			get_msg(conn, msg);
++			if ((r = sshbuf_get_u8(msg, &type)) != 0 ||
++					(r = sshbuf_get_u32(msg, &id)) != 0)
++				fatal_fr(r, "parse");
++
++			if (id != expected_id)
++				fatal("ID mismatch (%u != %u)", id, expected_id);
++
++			if (type == SSH2_FXP_STATUS) {
++				u_int status;
++
++				if ((r = sshbuf_get_u32(msg, &status)) != 0)
++					fatal_fr(r, "parse status");
++				error("Couldn't canonicalize: %s", fx2txt(status));
++				sshbuf_free(msg);
++				return NULL;
++			}
++		} else {
++			error("Couldn't canonicalize: %s", fx2txt(status));
++			sshbuf_free(msg);
++			return NULL;
++		}
+ 	} else if (type != SSH2_FXP_NAME)
+ 		fatal("Expected SSH2_FXP_NAME(%u) packet, got %u",
+ 		    SSH2_FXP_NAME, type);
+@@ -1039,9 +1067,9 @@ do_realpath_expand(struct sftp_conn *con
+ }
+ 
+ char *
+-do_realpath(struct sftp_conn *conn, const char *path)
++do_realpath(struct sftp_conn *conn, const char *path, int create_dir)
+ {
+-	return do_realpath_expand(conn, path, 0);
++	return do_realpath_expand(conn, path, 0, create_dir);
+ }
+ 
+ int
+@@ -1055,9 +1083,9 @@ do_expand_path(struct sftp_conn *conn, c
+ {
+ 	if (!can_expand_path(conn)) {
+ 		debug3_f("no server support, fallback to realpath");
+-		return do_realpath_expand(conn, path, 0);
++		return do_realpath_expand(conn, path, 0, 0);
+ 	}
+-	return do_realpath_expand(conn, path, 1);
++	return do_realpath_expand(conn, path, 1, 0);
+ }
+ 
+ int
+@@ -1807,7 +1835,7 @@ download_dir(struct sftp_conn *conn, con
+ 	char *src_canon;
+ 	int ret;
+ 
+-	if ((src_canon = do_realpath(conn, src)) == NULL) {
++	if ((src_canon = do_realpath(conn, src, 0)) == NULL) {
+ 		error("Unable to canonicalize path \"%s\"", src);
+ 		return -1;
+ 	}
+@@ -2115,12 +2143,12 @@ upload_dir_internal(struct sftp_conn *co
+ int
+ upload_dir(struct sftp_conn *conn, const char *src, const char *dst,
+     int preserve_flag, int print_flag, int resume, int fsync_flag,
+-    int follow_link_flag)
++    int follow_link_flag, int create_dir)
+ {
+ 	char *dst_canon;
+ 	int ret;
+ 
+-	if ((dst_canon = do_realpath(conn, dst)) == NULL) {
++	if ((dst_canon = do_realpath(conn, dst, create_dir)) == NULL) {
+ 		error("Unable to canonicalize path \"%s\"", dst);
+ 		return -1;
+ 	}
+@@ -2557,7 +2585,7 @@ crossload_dir(struct sftp_conn *from, st
+ 	char *from_path_canon;
+ 	int ret;
+ 
+-	if ((from_path_canon = do_realpath(from, from_path)) == NULL) {
++	if ((from_path_canon = do_realpath(from, from_path, 0)) == NULL) {
+ 		error("Unable to canonicalize path \"%s\"", from_path);
+ 		return -1;
+ 	}
+diff -up openssh-8.7p1/sftp-client.h.scp-sftpdirs openssh-8.7p1/sftp-client.h
+--- openssh-8.7p1/sftp-client.h.scp-sftpdirs	2021-08-20 06:03:49.000000000 +0200
++++ openssh-8.7p1/sftp-client.h	2022-02-07 12:31:07.410740433 +0100
+@@ -111,7 +111,7 @@ int do_fsetstat(struct sftp_conn *, cons
+ int do_lsetstat(struct sftp_conn *conn, const char *path, Attrib *a);
+ 
+ /* Canonicalise 'path' - caller must free result */
+-char *do_realpath(struct sftp_conn *, const char *);
++char *do_realpath(struct sftp_conn *, const char *, int);
+ 
+ /* Canonicalisation with tilde expansion (requires server extension) */
+ char *do_expand_path(struct sftp_conn *, const char *);
+@@ -159,7 +159,7 @@ int do_upload(struct sftp_conn *, const
+  * times if 'pflag' is set
+  */
+ int upload_dir(struct sftp_conn *, const char *, const char *, int, int, int,
+-    int, int);
++    int, int, int);
+ 
+ /*
+  * Download a 'from_path' from the 'from' connection and upload it to
+diff -up openssh-8.7p1/sftp.c.scp-sftpdirs openssh-8.7p1/sftp.c
+--- openssh-8.7p1/sftp.c.scp-sftpdirs	2021-08-20 06:03:49.000000000 +0200
++++ openssh-8.7p1/sftp.c	2022-02-07 12:31:07.411740442 +0100
+@@ -760,7 +760,7 @@ process_put(struct sftp_conn *conn, cons
+ 		if (globpath_is_dir(g.gl_pathv[i]) && (rflag || global_rflag)) {
+ 			if (upload_dir(conn, g.gl_pathv[i], abs_dst,
+ 			    pflag || global_pflag, 1, resume,
+-			    fflag || global_fflag, 0) == -1)
++			    fflag || global_fflag, 0, 0) == -1)
+ 				err = -1;
+ 		} else {
+ 			if (do_upload(conn, g.gl_pathv[i], abs_dst,
+@@ -1577,7 +1577,7 @@ parse_dispatch_command(struct sftp_conn
+ 		if (path1 == NULL || *path1 == '\0')
+ 			path1 = xstrdup(startdir);
+ 		path1 = make_absolute(path1, *pwd);
+-		if ((tmp = do_realpath(conn, path1)) == NULL) {
++		if ((tmp = do_realpath(conn, path1, 0)) == NULL) {
+ 			err = 1;
+ 			break;
+ 		}
+@@ -2160,7 +2160,7 @@ interactive_loop(struct sftp_conn *conn,
+ 	}
+ #endif /* USE_LIBEDIT */
+ 
+-	remote_path = do_realpath(conn, ".");
++	remote_path = do_realpath(conn, ".", 0);
+ 	if (remote_path == NULL)
+ 		fatal("Need cwd");
+ 	startdir = xstrdup(remote_path);
diff --git a/openssh.spec b/openssh.spec
index f419b72..432148e 100644
--- a/openssh.spec
+++ b/openssh.spec
@@ -201,8 +201,17 @@ Patch977: openssh-8.7p1-scp-kill-switch.patch
 Patch978: openssh-8.7p1-upstream-cve-2021-41617.patch
 # fix for `ssh-keygen -Y find-principals -f /dev/null -s /dev/null` (#2024902)
 Patch979: openssh-8.7p1-find-principals-fix.patch
-# Create non-existent directories when scp works in sftp mode
+# Create non-existent directories when scp works in sftp mode and some more minor fixes
+# upstream commits:
+# ba61123eef9c6356d438c90c1199a57a0d7bcb0a
+# 63670d4e9030bcee490d5a9cce561373ac5b3b23
+# ac7c9ec894ed0825d04ef69c55babb49bab1d32e
 Patch980: openssh-8.7p1-sftpscp-dir-create.patch
+# Workaround for lack of sftp_realpath in older versions of RHEL
+# https://bugzilla.redhat.com/show_bug.cgi?id=2038854
+# https://github.com/openssh/openssh-portable/pull/299
+# downstream only
+Patch981: openssh-8.7p1-recursive-scp.patch
 
 Patch1000: openssh-8.7p1-minimize-sha1-use.patch
 
@@ -385,6 +394,7 @@ popd
 %patch978 -p1 -b .cve-2021-41617
 %patch979 -p1 -b .find-principals
 %patch980 -p1 -b .sftpdirs
+%patch981 -p1 -b .scp-sftpdirs
 
 %patch200 -p1 -b .audit
 %patch201 -p1 -b .audit-race
@@ -671,9 +681,11 @@ test -f %{sysconfig_anaconda} && \
 %endif
 
 %changelog
-* Wed Feb 02 2022 Dmitry Belyavskiy <dbelyavs@redhat.com> - 8.7p1-7
+* Mon Feb 07 2022 Dmitry Belyavskiy <dbelyavs@redhat.com> - 8.7p1-7
 - Switch to SFTP protocol in scp utility by default - upstream fixes
   Related: rhbz#2001002
+- Workaround for RHEL 8 incompatibility in scp utility in SFTP mode
+  Related: rhbz#2038854
 
 * Tue Dec 21 2021 Dmitry Belyavskiy <dbelyavs@redhat.com> - 8.7p1-6
 - Fix SSH connection to localhost not possible in FIPS