What Is a DSCR Loan?

A DSCR (Debt Service Coverage Ratio) loan is a type of investment property mortgage that qualifies the borrower based on the rental income of the property rather than the borrower's personal income. The DSCR is calculated by dividing the property's gross rental income by its total monthly debt obligations (principal, interest, taxes, insurance, and HOA). A DSCR of 1.0 means the property's income exactly covers its expenses; most lenders prefer 1.0–1.25 or higher.

Who Is a DSCR Loan For?

DSCR loans are ideal for real estate investors who own multiple properties, are self-employed with complex tax returns, or simply prefer to keep their investment financing separate from their personal finances. No W-2s, no tax returns, and no personal income verification — the property does the qualifying.

DSCR Loan Requirements

Typical DSCR loan requirements include a minimum credit score of 620–680, a down payment of 20–25%, and a DSCR of at least 1.0 (some lenders allow below 1.0 with a larger down payment). The property must be a non-owner-occupied investment property — single-family, 2–4 unit, or short-term rental (Airbnb/VRBO eligible on select programs).

Key Benefits

• No personal income or tax returns required
• Qualify based on property rental income
• Short-term rental (Airbnb/VRBO) eligible on select programs
• Single-family, 2–4 unit, and condo eligible
• Minimum 620 credit score on some programs
• Cash-out refinance available
• Unlimited number of financed properties
• Close in an LLC or entity name