DSCR Loans
Qualify based on property cash flow — no personal income or tax returns required.
Program Overview
DSCR (Debt Service Coverage Ratio) loans are designed specifically for real estate investors. Instead of qualifying on your personal income, you qualify based on whether the rental income from the subject property is sufficient to cover the mortgage payment.
DSCR is calculated by dividing the monthly rental income by the monthly mortgage payment (PITIA). A ratio of 1.0 means the property breaks even; most lenders want 1.0–1.25 or higher. Some lenders offer "No Ratio" DSCR for strong-credit borrowers even if the property doesn't fully cover the payment.
DSCR loans are non-QM (non-qualified mortgage) products, so guidelines vary significantly by lender. They are a powerful tool for investors looking to scale their portfolio without being limited by personal W-2 income.
At a Glance
Who May Qualify
- Real estate investors purchasing 1–8 unit investment properties
- Borrowers who want to qualify on rental income rather than personal income
- Minimum credit score typically 640–680 (lender-dependent)
- DSCR ratio typically 1.0 or higher (some lenders allow below 1.0 or No Ratio)
- Down payment typically 20–25% minimum
- No employment verification or tax returns required in most cases
- Short-term rentals (Airbnb/VRBO) may qualify with documented rental income
Advantages
- No personal income, W-2s, or tax returns required
- Unlimited number of properties in most cases
- Close in LLC name (lender-dependent)
- Available for short-term rentals
- Faster qualification process
- Scale your portfolio without DTI constraints
Considerations
- Higher down payment requirements than owner-occupied loans
- Non-QM product — rates are higher than conventional investment loans
- No primary residence use — investment property only
- Larger cash reserves often required
- Guidelines vary widely between lenders
DSCR loans are non-QM products and are subject to significant variation in guidelines, rates, and terms across lenders. This information is for educational purposes only. Contact a licensed loan officer for current program availability and eligibility.
Ready to See If You Qualify?
Get a free personalized review from Alberto Cruz — a licensed loan officer who works with all of these programs daily.