Specialty Lending
DSCR Loans
Qualify based on what the property earns, not what you make. DSCR loans are built for real estate investors who want to grow their portfolio without the limitations of traditional income documentation.
Smart Financing. Personal Service.
How It Works
What You Need to Know About DSCR Loans
DSCR loans remove the biggest obstacle most investors face when trying to grow their portfolio. Here is how they work and what to expect.
1
Income Comes From the Property
Lenders look at the gross rental income of the investment property, not your personal tax returns or employment history. This makes DSCR loans ideal for self employed investors and those with complex income structures.
2
The Math Is Simple
Take the monthly rental income and divide it by the monthly mortgage payment. A ratio at or above 1.0 generally means the property qualifies. Some lenders will go below 1.0 with a larger down payment.
3
No Personal Income Docs Required
You will not need W2s, pay stubs, or tax returns. The property's income does the qualifying work, which speeds up the process significantly.
4
Short Term Rentals Are Eligible
Properties rented on platforms like Airbnb or VRBO can qualify using a market rent analysis or actual income history depending on the lender's guidelines.
5
Portfolio Growth Friendly
Because DSCR loans do not count against your personal debt to income ratio the same way conventional loans do, they are well suited for investors looking to acquire multiple properties.
Basic Eligibility Requirements
Property Type: Single family, multifamily up to 4 units, or short term rental
DSCR: Typically 1.0 or higher, some lenders allow lower with more down
Credit Score: Generally 680 or higher
Down Payment: Typically 20% to 25% minimum
Loan Purpose: Purchase or cash out refinance of investment property
Occupancy: Investment property only, not primary residence
Documentation: Lease agreement or market rent analysis required
Location: Texas, Florida, Minnesota, or Colorado
Pros and Cons
Is a DSCR Loan Right for You?
DSCR loans open doors for investors who cannot or do not want to qualify using personal income. Here is what to weigh before moving forward.
The Advantages
- No personal income documentation required — qualify based on the property alone.
- No limit on the number of financed properties in most cases.
- Works for self employed investors who write off significant income on their taxes.
- Eligible for short term and vacation rental properties.
- Faster processing since there is no personal income verification involved.
- Can be used for both purchase and cash out refinance of investment properties.
The Tradeoffs
- Higher down payment required than owner occupied loan programs.
- Interest rates are typically higher than conventional investment property loans.
- Only available for investment properties, not primary residences.
- Properties with low or no rental history can be harder to qualify.
- Credit score requirements are stricter than some conventional programs.
Who It's Best For
DSCR Loans Work Best For...
This program is built for investors, not owner occupants. If you are growing a rental portfolio, this is worth understanding.
Real Estate Investors
Buyers purchasing a single family or small multifamily property as a rental who want to qualify based on what the property earns rather than their personal income.
Self Employed Borrowers
Investors who write off significant expenses on their taxes and show low net income, making traditional income documentation a barrier to qualifying.
Short Term Rental Owners
Buyers purchasing or refinancing a vacation rental or Airbnb property who need a loan program that understands and accounts for short term rental income.
Common Questions
Frequently Asked Questions
Straight answers to the questions we hear most often.
What is a DSCR loan?
A DSCR loan is a mortgage designed for real estate investors that qualifies you based on the rental income of the property rather than your personal income. DSCR stands for Debt Service Coverage Ratio.
What is a Debt Service Coverage Ratio?
It is the ratio of the property's gross rental income to its monthly mortgage payment. A ratio of 1.0 means the rental income exactly covers the payment. Most lenders want to see a ratio of 1.0 or higher.
Do I need to show personal income to qualify?
No. DSCR loans do not require tax returns, W2s, or personal income verification. Qualification is based entirely on the property's ability to generate rental income.
What types of properties qualify for a DSCR loan?
Single family rentals, small multifamily properties, and short term rentals such as Airbnb and VRBO can all qualify depending on the lender's guidelines.
Can I use a DSCR loan for a short term rental?
Yes. Many lenders will use a market rent analysis or the property's actual short term rental income history to calculate the DSCR for vacation and short term rental properties.
Not Sure Where to Start?
Let's Figure It Out Together.
Whether you're ready to apply or just exploring your options, we're here to help. No pressure, no obligation, just honest guidance.