DSCR Loans
Investment-property loans qualified on rental income alone.
Overview
DSCR stands for Debt-Service Coverage Ratio — it's the technical, industry-wide term for a loan type that qualifies an investment property based on the ratio of its rental income to its debt obligations, rather than the borrower's personal income or employment. This is the underlying loan structure behind our client-facing Investor Cash Flow program; this page focuses on how the DSCR calculation itself works for investors and industry professionals researching the loan type by its formal name.
Who It’s For & What You’ll Need
- A calculated DSCR (rental income divided by the property’s PITIA — principal, interest, taxes, insurance, and association dues) that meets the lender’s minimum threshold
- No personal income or employment documentation required in most cases
- A larger down payment than a typical owner-occupied purchase, since the property is non-owner-occupied
- A qualifying credit score and post-closing cash reserves
- The property must be non-owner-occupied
Benefits
- Qualify without tax returns, W-2s, or employment verification
- Close in the name of an LLC or other entity in many cases
- Not subject to the same personal debt-to-income caps that limit conventional financing across multiple properties
- Often a faster underwriting process due to reduced personal documentation
Common Scenarios
- An investor evaluating a potential rental purchase by running its projected rent against its estimated PITIA before making an offer.
- An investor comparing DSCR qualification across several lenders with different minimum ratio requirements.
- A portfolio investor structuring a purchase under an LLC using DSCR qualification.
Frequently Asked Questions
What counts as a "good" DSCR ratio?
A ratio of 1.0 means the property’s rental income exactly covers its debt obligations; many lenders look for a ratio above 1.0, though some programs will consider properties below that threshold with compensating factors, such as a larger down payment.
Can I get a DSCR loan if the property’s ratio is below 1.0?
Some lenders in our network will consider below-1.0 DSCR properties, typically with a larger down payment or stronger reserves to offset the shortfall. Guidelines vary significantly by lender.
Can a first-time investor get a DSCR loan?
Yes — DSCR qualification is based on the property’s cash flow rather than a borrower’s investment track record, so first-time investors can qualify if the property and their financial profile meet the lender’s guidelines.
Is a DSCR loan the same thing as your Investor Cash Flow program?
Yes — DSCR is the formal, technical name for this loan type across the mortgage industry. We market the same underlying loan to clients as our Investor Cash Flow program; see that page for a client-facing walkthrough.
Related Calculators
Run your own numbers before you apply:
Ready to Move Forward with DSCR Loans?
Start your application, or talk it through with a loan officer first — whichever fits where you are.