DSCR Loans
Debt Service Coverage Ratio loans for investment properties based on rental income potential.
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Overview
DSCR (Debt Service Coverage Ratio) loans are innovative financing solutions designed for real estate investors who want to qualify based on the property's rental income potential rather than personal income verification. These loans are perfect for investors building rental property portfolios, as they focus on the property's ability to generate sufficient cash flow to cover the mortgage payments.
Unlike traditional mortgages that require extensive personal income documentation, DSCR loans streamline the qualification process by analyzing the property's rental income against the proposed mortgage payment. This makes them ideal for self-employed investors, those with complex tax situations, or anyone looking to expand their investment portfolio without the constraints of traditional income verification.
Key Benefits
- No personal income verification required
- Qualify based on property cash flow potential
- Perfect for self-employed investors
- Portfolio lending options available
- Competitive interest rates
- Loan amounts up to $5 million
- Terms up to 30 years available
- Cash-out refinancing options
- Multiple property financing
- Streamlined application process
Requirements
- Minimum credit score of 640
- Property must have positive cash flow (DSCR ≥ 1.0)
- Down payment of 20-25% minimum
- Property appraisal and rent roll analysis
- Landlord experience preferred but not required
- Property insurance and reserves required
- Single-family to 4-unit properties eligible
- Investment property only (no owner-occupied)
Our Process
Submit application with property details and rental information
Property appraisal and rental market analysis
DSCR calculation and cash flow verification
Credit and asset verification
Loan approval and terms finalization
Property inspection and final underwriting
Closing and fund disbursement
Frequently Asked Questions
What is a good DSCR ratio for loan approval?
We typically require a minimum DSCR of 1.0, meaning the property's rental income covers the mortgage payment. However, ratios of 1.2 or higher often qualify for better rates and terms.
Can I use projected rents for a vacant property?
Yes, we can use market rent analysis and comparable properties to determine rental income potential for vacant properties or those requiring renovation.
Do I need landlord experience?
While landlord experience is preferred, it's not strictly required. First-time investors can qualify with strong credit and adequate reserves.
What types of properties are eligible?
Single-family homes, condos, townhomes, and 2-4 unit properties are eligible. The property must be used as an investment rental, not as a primary residence.
How long does the approval process take?
Our DSCR loan approval process typically takes 21-30 days from complete application to closing, depending on property complexity and appraisal timing.
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