DSCR Loan Explained
A DSCR (Debt Service Coverage Ratio) loan is a real estate investment loan that qualifies borrowers based on the property’s cash flow—not personal income. It’s one of the fastest and easiest ways for investors to qualify.
What DSCR Means
DSCR = Property Income ÷ Property Expenses
A DSCR of 1.0 means the property pays for itself.
A DSCR above 1.0 means the property cash flows.
Why Investors Use DSCR Loans
- No tax returns
- No W‑2s or pay stubs
- Qualify using rental income
- Fast approvals
- Great for growing rental portfolios
- Works for long‑term and short‑term rentals (Airbnb/VRBO)
Who DSCR Loans Are For
- Real estate investors
- Self‑employed borrowers
- Borrowers with complex income
- Investors buying or refinancing rental properties
- Airbnb/short‑term rental owners
Basic Requirements
- DSCR typically 0.75–1.0+
- 15%–25% down payment
- 620+ credit score
- Property must be income‑producing
- Appraisal with rental schedule (1007)
Property Types Allowed
- Single‑family homes
- Condos
- Townhomes
- 2–4 unit properties
- Some lenders allow 5+ units
- Short‑term rentals allowed with proof of market rents
Benefits
- No personal income verification
- No employment verification
- Close in an LLC
- Flexible guidelines
- Perfect for scaling rental portfolios
Next Steps
If you’re an investor looking for fast, income‑based approval, a DSCR loan may be the best option. Compare DSCR lenders, review rental income projections, and calculate your DSCR before applying.
Ready to see your loan options? Start below — fast, secure, and no credit impact.