WHAT IS A DSCR LOAN?
A DSCR (Debt Service Coverage Ratio) loan is designed for real estate investors who want to qualify based on property cash flow rather than personal income. It's ideal for borrowers who prefer not to document employment or income.
DSCR loans are typically used for purchasing or refinancing investment properties and are especially popular for those investing in short-term rentals.
DSCR
LOAN OVERVIEW:
A Debt-Service Coverage Ratio (DSCR) loan is designed specifically for real estate investors. Instead of relying on the borrower’s personal income, qualification is based on the property’s rental income. Lenders calculate a DSCR ratio — which compares the property's gross rental income to its monthly debt obligations — and a ratio above 1.25 typically qualifies.
Because the borrower’s personal income, tax returns, or employment status are not considered, DSCR loans are ideal for self-employed individuals, gig economy workers, and those with complex or limited income documentation.
DSCR loans allow investors to qualify based solely on asset performance, offering faster turn times, minimal paperwork, and more flexibility in building a real estate portfolio.
PROGRAM BENEFITS
- Great for self-employed investors or borrowers with complex financials
- Get to the closing table quickly — ideal for competitive market scenarios
- Loans are approved based on the property's rental income, not borrower income
- Includes Airbnb, VRBO, and other income-generating properties
- Can be used for 1–4 unit properties, condos, and non-warrantable units
- Access more equity to fund your investment goals
- Perfect for experienced real estate investors expanding their portfolio
REQUIREMENTS
- Competitive rates start at 620, but higher scores may offer better terms
- Generally requires a DSCR of 1.25 or higher — meaning the rental income covers 125% of the monthly expenses
- Depending on the lender and property type, a rental survey or 1007 form may be necessary
- Including all liens on the property, the combined loan-to-value must not exceed 80%
- Typically 3–6 months of mortgage payments, depending on the loan structure
- Borrower cannot occupy the property; DSCR loans are strictly for income-producing properties
LOAN OPTIONS:
DSCR loans give investors the ability to qualify based on the cash flow of the property instead of personal income — a powerful option for those with complex tax returns, variable income, or multiple properties.
There’s no need for W-2s, tax returns, or employment verification. As long as the rental income covers the property’s expenses, investors can qualify, typically with a DSCR ratio of 1.25 or higher.
These loans are ideal for short-term rentals, long-term holds, and refinance scenarios, especially when speed and simplicity matter. With competitive terms and minimal paperwork, DSCR loans are built for borrowers focused on asset performance over personal documentation.
How Do You Qualify for a DSCR Loan?
If you're looking to finance an investment property, start by speaking with a loan specialist at (213) 810-2091 to see if a DSCR loan is right for you.
To qualify, the property must generate enough rental income to cover the monthly mortgage — usually with a DSCR ratio above 1.25. That means the property should cash flow on its own, without relying on your personal income.
You’ll also need to meet basic credit score and CLTV requirements, and in some cases, provide reserves or a rental analysis with the appraisal.
DSCR loans are a great fit for real estate investors looking for speed, simplicity, and flexibility.
HOW LOW WILL YOUR PAYMENT BE?