Investor financing
Qualify based on what the property earns, not what you report on your taxes.
A DSCR loan is designed for investors who want to finance rental property based on the income that property generates. Instead of relying heavily on personal income documentation, lenders look at whether the rent covers the mortgage payment. For investors with multiple properties, complex tax situations, or self-employment income, DSCR loans often provide a cleaner path to financing.
Typical terms
Loan-to-value
Up to 80% LTV
Term
30-year fixed or adjustable
Minimum DSCR
Typically 1.0x or higher
Property types
SFR, 2-4 unit, condo, townhome, multifamily
Credit score
Usually 660+ (varies by lender)
Closing speed
2-4 weeks typical
DSCR stands for debt service coverage ratio. Lenders calculate it by dividing the property's gross rental income by the total monthly debt payment (principal, interest, taxes, insurance, and HOA if applicable).
A DSCR of 1.0 means the rent exactly covers the payment. Most lenders prefer 1.1 or higher, though some programs allow ratios below 1.0 for strong borrowers with other compensating factors.
DSCR loans are popular with buy-and-hold investors, landlords adding to a portfolio, and borrowers who want to avoid providing extensive personal income documentation. They are also commonly used for refinancing stabilized rental properties out of short-term bridge or hard-money debt.
Beyond the DSCR ratio itself, lenders typically evaluate the property's location and condition, the borrower's credit score, the loan-to-value ratio, and the borrower's real estate experience. Some programs also consider cash reserves and the overall strength of the rental market.
Conventional investment loans rely on full income documentation and debt-to-income calculations. DSCR loans simplify that by focusing on property cash flow. The tradeoff is that DSCR rates are typically slightly higher, but the qualification process is significantly faster and less documentation-heavy.
Learn more
A DSCR loan qualifies you based on rental income, not personal tax returns. Here is how it works, who it is for, and what lenders actually look at.
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Bridge and DSCR loans solve different problems. Here is a clear comparison of when each one makes sense based on your property, timeline, and strategy.
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FAQ
Common questions about this financing option.
Most lenders require a minimum credit score of 660, though some programs go lower with higher down payments or stronger DSCR ratios. A score above 720 typically qualifies for the best rates.
Yes. Many DSCR programs accept Airbnb, VRBO, and other short-term rental income. Some lenders use actual rental history, while others use projected market rent from an appraiser.
Most DSCR loans close in 2 to 4 weeks, though some lenders can move faster for experienced borrowers with clean files.
Generally no. The primary qualification metric is the property's rental income relative to the payment. However, lenders still verify credit, assets, and experience.
For investors
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