DSCR Loans: Invest in Real Estate Without Traditional Income
A Debt Service Coverage Ratio (DSCR) loan is designed specifically for real estate investors who want to qualify for financing based on a property’s income potential — not their personal income.
Instead of verifying tax returns, pay stubs, or W-2s, lenders use the property’s rental income to determine loan eligibility. This makes DSCR loans ideal for self-employed investors, business owners, and those with complex income situations.
How DSCR Loans Work
Lenders calculate the Debt Service Coverage Ratio by dividing the property’s gross rental income by its total monthly mortgage payments (including principal, interest, taxes, insurance, and HOA dues if applicable).
DSCR Formula Example
If a property earns $2,500/month in rent and the mortgage payment is $2,500/month,
$2,500 ÷ $2,500 = 1.00 DSCR.
That means the property earns 100% of the mortgage costs — a strong ratio that can be approved
Why Choose a DSCR Loan?
- No Personal Income Verification — No tax returns, W-2s, or pay stubs needed.
- Qualify Based on Rental Income — Approval is based on property cash flow.
- Flexible Property Types — Single-family, multi-family (up to 10 units), condos, townhomes, and some mixed-use properties.
- Ideal for Self-Employed Borrowers — Perfect for those with write-offs that reduce taxable income.
- Available for Multiple Properties — Build or expand your real estate portfolio faster.
Common DSCR Loan Requirements
While exact terms vary by lender, most DSCR loan programs include:
- Minimum DSCR: 0.75 to 1.25 (lower ratios allowed with larger down payments)
- Down Payment: Typically 20–30%
- Credit Score: Usually 620+ (higher scores may get better rates)
- Loan Purpose: Purchase, refinance, or cash-out refinance
- Property Must Generate Rental Income — Long-term or short-term rentals allowed (Airbnb/VRBO acceptable with some lenders)
Long-Term vs. Short-Term Rental DSCR Loans
- Long-Term Rentals: Income based on annual lease agreements.
- Short-Term Rentals: Income often based on Airbnb/VRBO data, property management statements, or market rent surveys.
We work with lenders who specialize in short-term rental DSCR loans, helping investors qualify even if the property hasn’t been rented yet.
Who Should Consider a DSCR Loan?
DSCR loans are a great fit if you:
- Are a real estate investor expanding your portfolio
- Have significant rental income but limited taxable income
- Own multiple investment properties
- Want to qualify without the hassle of traditional underwriting
- Plan to purchase or refinance short-term rental properties
How We Can Help
We specialize in matching real estate investors with competitive DSCR loan programs from top wholesale lenders.
Our role is to:
- Compare multiple DSCR lenders and rates
- Help structure your loan for the best approval odds
- Work with both new and experienced investors
- Provide fast, hassle-free closings
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