DSCR loan
Qualify based on your rental property's income — no W-2s, no tax returns, no income limits.
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Everything you need to know about the DSCR loan in under 3 minutes
What is the DSCR loan?
What are the benefits?
- No W-2s, pay stubs, or tax returns required. Qualification is based entirely on the property's rental income.
- No cap on the number of financed properties. Scale your portfolio without the limits that conventional loans impose on how many mortgages you can carry.
- Close in an LLC or trust. Get asset protection without affecting your ability to qualify.
- Airbnb and VRBO income counts. Short-term rental income can be used to qualify, with proper documentation.
- Closings in 21–30 days. No income verification means a faster, leaner process than traditional investment loans.
- Wide range of eligible property types. Single-family rentals, 2–4 unit properties, condos, and short-term vacation rentals all qualify.
What are the requirements?
- Minimum credit score of 620–680 (varies by lender and program)
- Minimum DSCR of 1.0–1.25 (rental income must equal or exceed monthly mortgage payment)
- Down payment of 20%–25% of the purchase price
- Maximum loan-to-value (LTV) of 75%–80% on purchase; 70%–75% on cash-out refinance
- Cash reserves of 3–12 months of mortgage payments
- Property must be non-owner-occupied and income-generating
- Professional appraisal required to confirm property value and market rent
- Must be used for investment property only — primary residences do not qualify
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Frequently Asked Questions
- How is DSCR calculated?
DSCR = Monthly Gross Rent ÷ Monthly Mortgage Payment (PITI). A DSCR of 1.0 means the rent exactly covers the mortgage. A DSCR of 1.25 means the property generates 25% more income than needed — which is the benchmark most lenders prefer for the best rates and terms.
- Can I qualify with a DSCR below 1.0?
Some lenders do offer programs for DSCRs below 1.0 — sometimes as low as 0.75 — but expect a higher interest rate, larger down payment, and stricter reserve requirements to offset the negative cash flow risk.
- What types of properties qualify?
Single-family rentals, 2–4 unit multifamily, condos, and short-term rentals (Airbnb/VRBO) all qualify. The property must be non-owner-occupied and actively generating — or projectable to generate — rental income.
- Are DSCR loans only for experienced investors?
No. First-time real estate investors are welcome. Lenders care about the property’s ability to generate income, not your investment history. As long as the rental income covers the mortgage payment and you meet the credit and down payment requirements, you can qualify.
- Can I close in an LLC?
Yes. DSCR loans are one of the few mortgage products that allow you to hold the property in a legal entity. Closing in an LLC gives you liability protection without impacting your loan qualification.
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