DSCR Rental

What does DSCR mean?

DSCR stands for "Debt Service Coverage Ratio", meaning that the loan is qualified based on a properties ability to cover the monthly payment with its rental income.

What are DSCR loans for?

DSCR loans are designed specifically for real estate investors building or refinancing rental property portfolios. These can ONLY be used for investment purposes.

DSCR VS Conventional...

A DSCR structure gives investors the flexibility to scale their rental portfolios without the limitations typically associated with traditional mortgage underwriting.

The Ins and Outs

Typical Loan Structure

• Loan amounts from $100,000 to $5,000,000+
• Loan terms of 30 years (or similar long-term structures)
• Fixed and adjustable rate options
• Interest-only options available in some programs
• Qualification based on rental income vs. debt obligations

What Lenders Look At

• Rental income (current or projected market rent)
• Debt Service Coverage Ratio (DSCR)
• Property condition and marketability
• Loan-to-value (LTV)
• Investor experience (helpful but not always required)

Credit Score

Eligible Property Types

• Single-family rental homes
• Townhomes and condominiums
• 2–4 unit multifamily properties
• Small multifamily rental properties

How The Process Works

Step 1 — Submit Property Details:
Provide basic information including property address, rental income, and loan request.

Step 2 — Deal Review & Lender Match:
The property and loan request are reviewed and matched with appropriate DSCR lenders.

Step 3 — Approval & Closing:
Once approved, the loan moves through underwriting and closes.

Common Uses for DSCR Loans

• Purchasing rental properties
• Refinancing existing rental properties
• Cash-out refinancing to access equity
• Expanding rental portfolios
• Replacing short-term financing with long-term loans

Common Mistakes Investors Make

• Overestimating rental income
• Not understanding DSCR requirements
• Choosing the wrong loan structure (IO vs fixed)
• Ignoring prepayment penalties
• Not planning long-term portfolio strategy

About DSCR

Advantages of DSCR financing

Qualification based on property cash flow
No traditional income verification requirements in many programs
Options for long term and short term rentals (AirBnb, VRBO, etc.)
Long-term loan structures for stabilized rental properties

How much?

Up to 85% of the purchase price
Up to 75% if refinancing
Loan amounts from $100,000 to $5,000,000. Higher amounts are reviewed on a case by case basis.
Rates range from 5.75% upward.
No experience is required, however previous experience usually allows for even better terms.
FICO 640+

Property Types

Single family rental homes
Small multifamily properties (1-4 units)
5+ unit multifamily
Mixed use reviewed on a case by case basis

Special Cases

Rural properties serviceable at lender's discretion
Vacancies causing lower current rent rolls have possibility of consideration via market rents.