DSCR Loan FAQs

DSCR = Monthly Gross Rental Income ÷ Monthly PITIA. For example: if a property rents for $2,500/month and the total PITIA payment is $2,000/month, the DSCR is 1.25 — meaning the property generates 25% more income than needed to service the debt. Use our free calculator to run your numbers.

Most lenders require a minimum DSCR of 1.0, meaning rental income equals or exceeds the monthly payment. Lenders with a 1.25 DSCR minimum often offer the best rates and terms. Some "no ratio" programs allow DSCRs as low as 0.75 with a larger down payment (30–35%) and strong compensating factors like excellent credit.

Conventional investment property mortgages require full personal income documentation (W-2s, tax returns, pay stubs, DTI ratio analysis) and typically cap borrowers at 10 financed properties. DSCR loans require no personal income docs, have no property count limits, and can close significantly faster than conventional loans — which often drag on for 45–60 days due to income documentation and underwriting queues.

No. DSCR loans do not require personal tax returns, W-2s, pay stubs, or employment verification. Qualification is based on the rental income of the subject property — making them ideal for self-employed investors, business owners, or anyone with complex tax situations.

Most DSCR lenders require a minimum credit score of 620–640. The best rates and highest LTV options are available with scores of 700 or above. Some programs go as low as 600 with strong compensating factors. Credit score requirements vary by lender — reach out to find the right program.

DSCR loans typically require a minimum down payment of 20–25% for a purchase (75–80% LTV). Some programs allow up to 80% LTV with strong DSCR and credit. For cash-out refinances, most lenders allow up to 75–80% LTV depending on the property type and DSCR.

Yes. DSCR loans are commonly closed in the name of an LLC, LP, or corporation. This is actually one of the advantages over conventional financing, which generally requires individual borrowers. Entity vesting requirements vary by lender — reach out for guidance on which programs work for your entity structure.

Yes, on select programs. Some lenders accept documented short-term rental income (from Airbnb, VRBO, etc.) or use AirDNA market data to underwrite STR properties. Others use the appraiser's long-term market rent as a conservative baseline. We can help match you with lenders who understand the short-term rental market and know how to underwrite these deals correctly.

DSCR loan rates are generally higher than owner-occupied conventional rates, reflecting the investment property nature of the loan. The exact rate you receive depends on your credit score, LTV, DSCR ratio, loan program, and current market conditions. Rates change daily — reach out for a current quote specific to your scenario.

Most DSCR lenders offer 30-year fixed, 5/1 ARM, 7/1 ARM, 10/1 ARM, and interest-only options (typically for a 10-year IO period, then converting to fully amortizing). The right term depends on your investment strategy and expected hold period.

Many DSCR loans carry prepayment penalties (also called step-down prepays), typically structured as 3-2-1 or 5-4-3-2-1 (meaning 3% in year 1, 2% in year 2, 1% in year 3, then none). Some lenders offer prepay-free options at a slightly higher rate. The right structure depends on your exit strategy — reach out for guidance.

Loan minimums are typically $100,000–$150,000. Most programs go up to $3M–$5M, with some lenders offering larger amounts for portfolio loans. For multi-unit properties (5+ units), commercial DSCR programs are available with higher loan limits.

DSCR loans require far fewer documents than conventional loans. Typically you'll need: government-issued ID, property purchase contract (for purchases), current lease agreement or rent roll, entity documents (if vesting in an LLC), bank statements to verify reserves, and credit authorization. No tax returns, no W-2s, no employment verification.

DSCR loans typically close faster than conventional investment property loans because there's no personal income documentation to process. Actual timelines depend on appraisal turnaround, title, and how quickly documents are provided — every deal is different. Getting your file organized early is the best way to keep things moving.

Getting a rate quote does not affect your credit — We can review your scenario without a hard pull. When you formally apply, a hard inquiry is required, which typically reduces scores by 5 points or less. Multiple mortgage inquiries within a 30-day window are treated as a single inquiry by most scoring models.