What Is a DSCR Loan?

A DSCR (Debt Service Coverage Ratio) loan is designed specifically for real estate investors who want to qualify for financing based on a property's income—not their personal income. Instead of requiring tax returns, W-2s, or pay stubs, DSCR loans focus on the cash flow of the investment property.

Lenders use the property's Debt Service Coverage Ratio to determine eligibility. This ratio compares the property's gross rental income to its monthly mortgage payment (including taxes, insurance, and HOA fees, if applicable).

• DSCR = Rental Income ÷ Monthly Mortgage Payment
• A DSCR of 1.0 means the property breaks even.
• A DSCR above 1.0 indicates the property generates positive cash flow.

These loans are ideal for investors looking to grow their rental portfolio without traditional income documentation. They typically require a larger down payment and are for non-owner-occupied properties.

Key Benefits:

• No income or employment verification
• Ideal for self-employed or seasoned investors
• Simplified qualification process
• Scalable solution for building wealth through real estate

Ready to leverage rental income to fund your next investment? A DSCR loan might be the perfect fit.