Loading…
DSCR Loans
A DSCR loan is a type of investment property financing evaluated primarily on the property's rental income relative to its debt obligations — not your personal income or employment history.
DSCR stands for Debt Service Coverage Ratio. A DSCR loan is a type of non-QM (non-qualified mortgage) financing built for real estate investors purchasing or refinancing non-owner-occupied property. Rather than qualifying primarily on personal income, tax returns, and debt-to-income ratio the way a conventional owner-occupied mortgage does, DSCR financing looks at whether the property's own rental income is sufficient to cover its debt obligation.
The general concept: divide the property's monthly rental income by its applicable monthly debt obligation (which, depending on the lender's methodology, may include principal, interest, taxes, insurance, and HOA dues). The result is the DSCR. A ratio above 1.0x generally indicates the property's income covers that obligation; a ratio below 1.0x generally means it falls short. Specific formulas, minimum ratios, and underwriting guidelines vary by lender and program — nothing here should be read as a universal standard.
Because qualification centers on the property rather than the borrower's personal income documentation, DSCR loans are commonly used by self-employed investors, investors with multiple financed properties, and investors who would rather not have each new acquisition tested against their overall personal debt-to-income ratio.
Buy your next rental property with financing structured around its projected income rather than solely your personal debt-to-income ratio.
Restructure an existing investment property loan to pursue different terms as your strategy, cash flow needs, or the market shifts.
Access equity in a property you already own to fund your next acquisition, renovation, or reinvest elsewhere in your portfolio.
Single-family, condo, townhome, and small multifamily rentals held for ongoing income.
Many DSCR lenders will consider projected short-term rental income where available and documented appropriately.
A repeatable qualification approach that doesn't rely on personal income growing in lockstep with each new acquisition.
Many real estate investors hold rental property inside an LLC or other business entity for liability and organizational reasons. DSCR loans are frequently structured to accommodate entity ownership, though specific requirements — entity documentation, personal guarantees, seasoning — vary by lender. We'll walk through what a given lender needs for your structure as part of your scenario review.
Tell us about the property — purchase or refinance, type, rental income — through our short qualification form.
Your scenario is reviewed against available DSCR programs and followed up with structures to consider.
A licensed mortgage professional walks through what a given lender needs for your scenario.
Move through underwriting toward closing with an appropriately licensed mortgage professional.
Tell us about the property and your goals — a loan specialist will follow up with financing options to consider.