DSCR Loans | Mortgage Market Update
Investment Financing

DSCR Loans

Specialized mortgage options for real estate investors—qualification based on property income, not your personal income.

No income verification Property-based qualification Multiple property financing
DSCR Loan Benefits
Debt Service Coverage Ratio (DSCR) loans offer unique advantages for real estate investors looking to expand their portfolios.

No Income Verification

Qualification based on property income rather than personal income, ideal for investors with complex tax returns.

Unlimited Properties

No limits on the number of financed properties, allowing serious investors to scale efficiently.

Competitive Rates

Attractive interest rates for investment properties compared to other investor loans.

Entity Ownership

Buy under LLCs, corporations, or partnerships for asset protection and easier portfolio management.

Quick Closing

Streamlined approval process with less documentation than traditional loans—get funded faster.

Flexible Terms

Choose from 30-year fixed, ARMs, and interest-only periods to match your investment strategy.

DSCR Loan Eligibility
Qualification focuses on the investment property’s income, not your personal salary.

Property Requirements

  • Non-owner occupied (investment only)
  • 1-4 units, condos, townhomes
  • Multifamily (5+ units) may qualify
  • Property must generate rental income

DSCR Calculation

  • DSCR ratio typically ≥ 1.0
  • Monthly Rental Income ÷ Loan Payment
  • Loan payment: PITI + HOA
  • Higher DSCR = better rates

Borrower Requirements

  • Credit score: 640–680+
  • Down payment: 20–25%
  • 6–12 months cash reserves
  • No income/employment check

Rental Income Determination

For DSCR loans, rental income can be based on actual leases, market rent analysis, or appraisal schedules for vacant units.

DSCR Ratio Impact

The DSCR ratio affects both loan terms and eligibility. DSCR ≥ 1.25 usually qualifies for the best rates.

The DSCR Loan Process
Securing a DSCR loan is streamlined and based on property cash flow, not your personal income.

Initial Consultation

Discuss your investment strategy, property, and financial goals to see if a DSCR loan is right for you.

DSCR Pre-Qualification

We analyze projected rent vs. expenses and estimate your qualifying loan amount.

Application & Documentation

Submit a loan application and basic docs—mainly property info and rent schedule.

Property Appraisal

A professional appraisal determines value and rental income potential.

Underwriting

Focus on the property’s cash flow, not your W2s or tax returns.

Closing

Sign final docs, fund your property, and start growing your portfolio—typically faster than with a conventional loan.

DSCR Loans vs. Other Investment Loan Options
Compare DSCR loans to other common investor financing options.
Feature DSCR Loan Conventional Investment Loan Hard Money Loan
Income Verification None (property income only) Full documentation required Minimal or none
Interest Rates Moderate (5–7%) Lowest (4–6%) Highest (8–12%+)
Down Payment 20–25% typically 15–25% 30–40% typical
Property Limit No limit Typically 10 financed No limit
Loan Term 30-year options available 15 or 30-year fixed 1–5 years typical
Closing Timeline 2–4 weeks 30–45 days 1–2 weeks

The Bottom Line

DSCR loans provide a flexible middle ground—longer terms than hard money, and no income paperwork like conventional loans. Perfect for scaling your portfolio.
What Our Investors Say
Real investors share how DSCR loans helped grow their portfolios.
★★★★★

As someone with multiple properties, DSCR loans have been a game-changer. I don’t worry about tax returns or DTI—my properties qualify on their own, and I can scale much faster.

Robert Thompson

Real Estate Investor (12 Properties)

★★★★★

The DSCR loan process was way more straightforward than conventional financing. Bought a fourplex under my LLC, closed in half the time.

Jennifer Chen

Multi-Family Investor

★★★★★

As a self-employed investor, DSCR loans focus on property cash flow, not my tax returns. I added three more rentals this year alone.

Marcus Wilson

Self-Employed Investor

Frequently Asked Questions
Common DSCR questions and answers.

What exactly is a DSCR loan?

A DSCR (Debt Service Coverage Ratio) loan is a mortgage for investment properties where the key qualification is property income, not your personal income. The DSCR ratio compares rental income to the loan’s monthly cost (must be ≥ 1.0).

How is the DSCR calculated?

DSCR = Monthly Rental Income ÷ Total Monthly Loan Payment (PITI + HOA). For example: $2,000 rent ÷ $1,600 payment = DSCR 1.25.

What credit score do I need?

Most lenders require 640–680+ for DSCR loans. Higher scores = better rates. Some accept as low as 620 with a bigger down payment.

Can I use DSCR for short-term rentals?

Yes, many DSCR lenders allow Airbnb/VRBO properties, often using market analysis or average short-term rental income for qualifying.

Are DSCR loans available for first-time investors?

Yes. Some lenders may ask for a larger down payment (25–30%) or extra reserves if it’s your first investment, but DSCR is open to new investors.

What properties qualify?

Single-family, 2–4 units, condos, townhomes, PUDs, some multifamily (5+), and mixed-use if mostly residential. Must be rental, not owner-occupied.


.E Mortgage Capital, Inc.

. - 1416824 | 18071 Fitch Ste 200, Irvine CA 92614

915 Highland Pointe Dr, Ste 200, Roseville, CA 95678

3401 Mallory Lane, Franklin, TN 37067

Notice To Texas Loan Applicants: Consumers wishing to file a complaint against a mortgage banker, or a licensed mortgage banker residential mortgage loan originator, should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, TX 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov

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A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at