DSCR Loans
Made Simple
DSCR Loan Benefits
No Job Verification
No Tax Documents Needed
Industry Low Rates
Reduced Loan Costs
Up to 40 yr. Term
Fast Funding
Is a DSCR Loan Right For You?
Have questions about DSCR loans? Below are answers to some of the most common questions.
What is a DSCR loan?
A DSCR (Debt Service Coverage Ratio) loan is a financing option for real estate investors that evaluates a property’s cash flow rather than the borrower’s personal income. This allows for the property to qualify borrower’s for the loan, not their own personal finances, income, or tax returns.
DSCR Loan Ratio Explained…
The Debt Service Coverage Ratio (DSCR) measures a property’s ability to cover debt payments. It’s calculated by dividing Net Operating Income (NOI) (rental income minus expenses) by total debt service (monthly loan payments). A DSCR of 1.0 means income matches debt payments, while above 1.0 indicates surplus income. Below 1.0 shows insufficient income. Lenders use DSCR to assess financial viability and risk, often requiring at least 1.0 or higher, with some needing 1.2 or more. Use our DSCR Loan Calculator to quickly analyze investments and ensure your property meets lender requirements.
What types of properties qualify for DSCR loans?
DSCR loans are designed for income-generating properties, including single-family homes, multi-units like duplexes or apartments, condominiums, and commercial properties such as office spaces or mixed-use developments. Properties qualify based on income from short-term rentals (STR) like Airbnb or Vrbo and long-term rentals (LTR) leased to tenants. The focus is on the property’s ability to generate enough rental income to cover its debt obligations, offering a flexible financing solution for real estate investors.
What are the benefits of a DSCR loan?
Where do we begin? The biggest advantage for most borrowers is the flexibility, requiring minimal documentation to qualify. Plus, rates are competitive, only slightly higher than traditional mortgages. There’s no need for personal income verification or tax returns, approvals are faster, and terms are tailored to investors focused on cash-flowing properties. Best of all, since qualification is based on the property’s cash flow, there’s virtually no limit to the number of DSCR loans a borrower can obtain.
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