DSCR Loans
Mortgage Solutions
For Real Estate Investors
DSCR = Rental Income ÷ Mortgage Payment
What is a DSCR Loan?
A Debt-Service Coverage Ratio (DSCR) Loan
is a creative mortgage program designed specifically for real estate investors. Instead of requiring W-2s or tax returns, DSCR loans qualify borrowers based on the cash flow of the investment property—not their personal income.
The DSCR Calculation Method
measures whether a property generates enough rental income to cover its mortgage payment. If the rental income is equal to or greater than the mortgage payment, the borrower qualifies for financing.
This Makes Dscr Loans Ideal For Investors Who
- Own multiple rental properties and want to avoid using personal income to qualify.
- Are self-employed with complex tax returns that don’t reflect their true income.
- Want to expand their real estate portfolio without hitting traditional lending limits.
- Need a cash-out refinance to pull equity from investment properties for reinvestment.
DSCR Loans vs Traditional Financing
| Feature | DSCR Loan | Conventional Loan |
|---|---|---|
| Income Verification |
Rental Income Only |
W-2s, Tax Returns |
| Best For |
Real Estate Investors |
High-Income Earners |
| Max LTV |
85% |
75-80% |
| Debt-to-Income Ratio (DTI) |
Not Required |
Required Max 43% |
| Number of Financed Properties |
No Limit |
Typically Capped at 10 |
| Max Loan Amount |
$6,000,000 |
$806,500 - Varies Annually by County |
How is DSCR Calculated?
A DSCR of 1.0 or higher - means the property’s income covers the mortgage.
Example - If a rental property generates $3,000/month and the mortgage payment is $2,500/month, the DSCR is 1.2, which qualifies under most DSCR programs.
Debt Service Coverage Ratio as low as
.80 may still qualify with additional reserves or a higher down payment.
What is the Minimum DSCR to Qualify? - Most lenders require a "One-To-One Ratio" or a minimum DSCR of 1.0, meaning the property must generate at least as much income as the monthly loan payment.
Low and No Ratio DSCR - Some programs allow DSCR below 1.0 with compensating factors like higher down payments, strong reserves, or higher credit scores. These can be .75 ratio DSCR loans or even no-Ratio DSCR loans meaning no requirement for rent to cover the mortgage payment.
Real Estate Investors – Buy rental properties with no personal income verification.
Self-Employed Borrowers
–
Use rental income instead of tax returns to qualify.
Multiple Property Owners
–
No limit on the number of properties financed.
Short-Term & Long-Term Rental Owners
–
Works for Airbnb, VRBO, and traditional rental properties.
Investors Looking for Cash-Out Refinancing
–
Pull equity from properties to reinvest.
First-Time Investors
–
Great option for those buying their first investment property without needing W-2 income verification.
DSCR Loan Program Details
| Features | Elite Loan DSCR |
|---|---|
| Loan Type |
DSCR Investor Loan |
| Best For |
Real Estate Investors, Multi-Property Owners, Short-Term Rentals |
| Max LTV |
85% |
| Min FICO Score |
660 |
| Income Documentation |
Rental Income Only (No Tax Returns or W-2s) |
| Property Types |
Single-Family, Multi-Family, Short-Term Rentals, Commercial |
| Interest Only Option? |
✅ Yes |
| Cash Out Refinancing |
✅ Yes |
| Prepayment Penalty |
Varies by Loan Type |
Debt Service Credit Ratio Loan Advantages
- No Tax Returns or W-2s Required – Qualify using rental income alone.
- Higher Loan-to-Value (LTV) – Up to 85% financing available.
- Cash-Out Refinance Options – Use property equity for reinvestment.
- Flexible Qualification – No personal DTI calculations required.
- Great for Portfolio Investors – No limit on the number of financed
- properties.
- Works for Short-Term Rentals - Airbnb, VRBO, etc.
- Faster Approvals – Less documentation means quicker loan closings.
- Interest-Only Payment Options – Lower monthly payments available.
Want to connect with a licensed
Non-QM Lender?
Have Questions? Contact us Today!
Need a Conventional Lender?
Check Out These Other Resources
Frequently Asked DSCR Loan Questions-FAQ
What is the minimum DSCR to qualify?
Some lenders can do .80 depending on the cirrcumstances. Most lenders require a minimum DSCR of 1.0, meaning the property’s income must cover at least the mortgage payment.
Do I need a high credit score for a DSCR loan?
Most DSCR loans require a minimum FICO score of 660, but higher scores may qualify for better terms.
Can I use a DSCR loan for an Airbnb or VRBO property?
Yes! Short-term rental properties qualify under most DSCR loan programs.
Do DSCR loans have prepayment penalties?
Prepayment penalties vary by program and lender. Some DSCR loans have 3-year prepayment penalties, while others offer no prepayment penalties.
Are there DSCR loans with interest-only payments?
Yes! Many DSCR loans offer interest-only payment options, reducing monthly mortgage payments.
Want to connect with a licensed
Non-QM Lender?
Have Questions? Contact us Today!
Need a Conventional Lender?
Check Out These Other Resources
Explore Your DSCR Lending Options
At Non-QM Loans.com, we specialize in connecting you with the right non-QM loan products Specialist to your needs. Whether you're looking for a DSCR Loan, Bank Statement Loan or a No Limit Jumbo Loan, we’re here to help you connect with the right expert for the loan you need.
