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Loan Types

DSCR Loan

Qualify on the property's rental income, not yours

Min. Down Payment
20-25%
Min. Credit Score
640+
Best For
Real estate investors
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What Is It?

Understanding the DSCR Loan

DSCR stands for Debt Service Coverage Ratio, a simple formula lenders use to see whether a rental property's income covers its own mortgage payment: monthly rental income divided by the monthly mortgage payment (principal, interest, taxes, insurance).

Instead of verifying your personal income like a traditional mortgage, a DSCR loan looks at whether the property pays for itself — making it a popular tool for investors scaling a rental portfolio without the paperwork of conventional financing.

Key Benefits

Why Borrowers Choose This Program

No personal income verification
Qualification is based on the property's cash flow, not your pay stubs.
Scale your portfolio faster
No cap tied to your personal debt-to-income ratio like conventional loans.
Close in an LLC
Many DSCR loans allow title to be held in a business entity.
Works for most property types
Single-family, multi-family, and short-term rental properties are typically eligible.

Who It's For

  • Real estate investors purchasing rental property
  • Investors with multiple properties who've maxed out conventional DTI limits
  • Self-employed investors who'd rather not document personal income
  • Buyers acquiring property through an LLC or business entity

Requirements to Qualify

  • DSCR ratio of 1.0-1.25+ typically preferred (rent covers or exceeds the payment)
  • Credit score generally 640 or higher
  • Down payment typically 20-25%
  • Property must be non-owner-occupied (investment only)
  • Cash reserves, usually several months of payments

Pros

  • No personal income or employment verification
  • Faster, simpler underwriting for investors
  • No limit tied to your personal DTI
  • Can close under an LLC or business entity

Cons

  • ✕Larger down payment than owner-occupied loans
  • ✕Rates typically higher than conventional financing
  • ✕Property must show sufficient rental income potential
FAQs

Common Questions About DSCR Loans

Most lenders prefer a DSCR of 1.0 or higher, meaning the rent fully covers the mortgage payment — though some programs allow slightly below 1.0 with a larger down payment.
Yes — an appraiser's market rent estimate (via a rent schedule) is typically used to calculate DSCR for a purchase.
In most cases, yes. DSCR loans are commonly used specifically because they allow title to close in a business entity.

Explore Other Loan Programs

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