Loan Options
DSCR Rental Loans
Qualify on what the property earns, not what you earn. No tax returns, no employment verification, no personal income calculation — the rent covers the debt or it doesn’t.
1.0
20%
5
What a DSCR loan is?
A DSCR loan is written against the rental income of the property you are buying or refinancing. The lender asks one question: does the rent cover the mortgage payment? If it does, your own tax returns, W-2s and employment history never enter the file.
That makes it the standard route for investors whose personal income is complicated — multiple entities, heavy depreciation, income that looks small on paper — and for anyone adding a fourth or fifth property when conventional guidelines have run out of room.
Who it suits
-
Investors with complex income
Several entities, aggressive write-offs or income that does not translate onto a tax return.
-
Growing portfolios
You already hold properties and conventional financing has hit its limit on how many it will count.
-
Speed-sensitive buyers
No income underwriting means a shorter file and a faster path to closing on a competitive deal.
How the ratio works
DSCR stands for debt service coverage ratio. It is a single number comparing what the property brings in against what it costs to service the loan.
1
We establish the rent
From the signed lease where one exists, or from the market rent schedule your appraiser prepares where the property is vacant.
2
We work out annual debt service
Principal, interest, property taxes, insurance and any HOA dues, totalled across twelve months.
3
We divide one by the other
That is your DSCR. At 1.0 the file works. At 1.2 or above you reach better pricing, because the lender is carrying less risk.
What You Will Need
Short list, because the things a conventional lender asks for are exactly the things this programme skips.
✓ Signed lease or rent schedule Whichever applies to the property |
✓ Appraisal with rent comparables Ordered by us once you are under contract |
✓ Property insurance quote Required before closing |
✓ Entity documents If you are buying through an LLC |
✓ Proof of funds Down payment, closing costs and reserves |
✓ Credit authorization Score only — no income documents |
Worked example: a property bringing in $36,000 a year against $30,000 of annual loan payments gives a DSCR of 1.2. The rent covers the debt with $6,000 to spare, which is comfortably inside guidelines and prices better than a file sitting at exactly 1.0.
Frequently Asked Questions: DSCR Rental Loans
A Debt-Service Coverage Ratio (DSCR) loan is a mortgage for real estate investors that qualifies borrowers based on the property’s rental cash flow rather than personal income. Lenders evaluate whether the gross rental income covers the property’s monthly debt service (principal, interest, taxes, insurance, and HOA dues) without requiring tax returns, W-2s, or employment verification.
Most lenders look for a minimum DSCR of 1.20 to 1.25, meaning the property’s rental income exceeds the monthly mortgage and holding costs by 20% to 25%. However, many programs allow a 1.0 ratio (break-even), and specialized “no-ratio” programs can accommodate scores below 1.0 for properties in high-appreciation or value-add markets.
A DSCR purchase typically requires a down payment of 20% to 25% (an 80% to 75% maximum Loan-to-Value ratio). Borrowers with higher credit scores (740+) and a DSCR of 1.25 or higher qualify for the lowest down payment options, while lower credit tiers or vacant properties may require 25% to 30% down.
No. DSCR underwriting completely bypasses personal debt-to-income (DTI) calculations. Lenders do not collect tax returns, W-2s, 1099s, or pay stubs. Qualification is determined solely by the property’s cash flow, the borrower’s credit score, and liquid asset reserves.
The standard minimum credit score for a DSCR loan is 620 to 660 FICO. Higher credit scores—typically 700 to 740+—unlock maximum leverage (up to 80% LTV), lower interest rates, and smaller cash reserve requirements.
Yes. DSCR loans can be used to purchase or refinance short-term and vacation rentals (Airbnb, VRBO). Lenders typically verify income using either a standard 1007 market rent schedule, historical 12-month platform statements, or third-party projection software like AirDNA.
Yes. Unlike conventional conforming loans that require title to be held in an individual’s personal name, DSCR lenders encourage closing under an LLC, corporation, or partnership to keep business liabilities separate from personal finances.
At a glance
Minimum DSCR
1.0
Down payment
20-25%
Maximum LTV
75-80%
Credit score
620+
Income docs
None
Belinda Biedebach
NMLS #1556597
Send the address and the rent. We will run the ratio and tell you where the file lands before you write an offer.
See what you qualify for
Pre-approval takes about ten minutes online and comes back within a day. No cost, no obligation, no effect on your credit score to find out.