DSCR loan requirements
DSCR loans let investors qualify on the property's rent instead of personal income — no tax returns, no debt-to-income math. Here is exactly what our underwriting looks for, how the ratio is calculated, and what to send to get a term sheet.
How DSCR is calculated
DSCR = gross monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, and HOA dues).
Example: a rental collecting $2,500 per month with a $2,000 PITIA payment has a DSCR of 1.25 — the rent covers the payment with a 25% cushion. At 1.0 the property breaks even; below 1.0 the file needs extra reserves or lower leverage.
DSCR calculator
Enter rent and the payment components to see your ratio, the qualifying range it lands in, and the maximum PITIA that still clears 1.00 and 1.20 coverage.
Enter your rental numbers
Lease amount, or market rent from a 1007 schedule.
Estimated monthly mortgage payment.
Annual tax bill divided by 12.
Hazard plus any flood premium.
Enter 0 if the property has no association.
1.25 DSCR
Strong (1.20 – 1.49)
Best pricing tier. Leverage commonly runs to 80%, and cash-out is available on seasoned files.
- Total PITIA
- $2,000
- Monthly cushion
- $500
- Max PITIA at 1.00
- $2,500
- Max PITIA at 1.20
- $2,083
Estimates only. Final DSCR, leverage, and pricing are set by underwriting after full review.
| Range | Tier | What to expect |
|---|---|---|
| Under 1.00 | Below breakeven | Reviewable with extra reserves, a lower LTV (typically 65–70%), or an interest-only structure to cut the payment. |
| 1.00 – 1.19 | Breakeven | Qualifies on most programs. Expect leverage in the 70–75% range and standard pricing. |
| 1.20 – 1.49 | Strong | Best pricing tier. Leverage commonly runs to 80%, and cash-out is available on seasoned files. |
| 1.50 and above | Excellent | Top-of-sheet pricing with leverage up to 85% on purchases for 700+ FICO borrowers. |
Program requirements at a glance
| Requirement | Current guideline |
|---|---|
| Minimum DSCR | 1.0 typical — 1.20+ for best pricing |
| Minimum FICO | 625+ personal credit score |
| Maximum LTV | Up to 85% (purchase); lower on cash-out |
| Loan amount | Up to $3,000,000 |
| Income documentation | None — no tax returns or W-2s |
| Property type | 1–4 unit, condo, STR, small multifamily |
| Occupancy | Investment / non-owner-occupied only |
| Vesting | LLC, corporation, or individual |
| Reserves | Typically 3–6 months of PITIA |
| Amortization | 30-year fixed and interest-only options |
Qualify without tax returns
Because the loan is business purpose and underwritten on the asset, there is no personal income review. That makes DSCR the fastest path for self-employed investors, borrowers with heavy write-offs, and anyone scaling a portfolio past conventional financing limits.
- Property address and current lease (or 1007 market rent schedule)
- Entity documents — articles, operating agreement, EIN letter
- Two months of bank statements showing reserves
- Insurance quote or binder for the subject property
- Government-issued ID for each guarantor
DSCR loan FAQs
What is a DSCR loan?
A DSCR (debt-service coverage ratio) loan is an investment-property mortgage underwritten on the property's rental income rather than the borrower's personal income. Lenders compare monthly rent to the monthly PITIA payment instead of reviewing W-2s or tax returns.
How is DSCR calculated?
DSCR = gross monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, and any HOA dues). A property renting for $2,500 with a $2,000 PITIA payment has a 1.25 DSCR.
What DSCR ratio do I need to qualify?
Most programs need a 1.0 DSCR or higher, meaning rent at least covers the payment. Ratios of 1.20 and above typically unlock better pricing and higher leverage, and some scenarios can be reviewed below 1.0 with additional reserves or a lower LTV.
What credit score is required for a DSCR loan?
Our qualification funnel is built around a 625+ personal FICO score. Stronger files at 700+ generally see the best rates and the highest leverage.
Do DSCR loans require tax returns?
No. There are no tax returns, W-2s, pay stubs, or personal debt-to-income calculations. Qualifying documentation centers on the lease or market rent schedule, entity documents, and reserves.
How much can I borrow and what is the maximum LTV?
Loan amounts run up to $3,000,000 with LTV up to 85% depending on occupancy, credit, and DSCR. Cash-out refinances are typically capped a few points below purchase leverage.
Can I close a DSCR loan in an LLC?
Yes. DSCR loans are business-purpose loans and are routinely closed in an LLC or corporation holding the investment property.
What property types are eligible?
1–4 unit rentals, condos, townhomes, short-term rentals with documented income, and small multifamily. The property must be non-owner-occupied and held for investment.
Can I get a DSCR loan with a ratio below 1.0?
Yes, in many cases. Sub-1.0 files are reviewed with additional reserves, a lower loan-to-value (usually 65–70%), or an interest-only payment structure that reduces PITIA enough to bring coverage closer to breakeven.
Do short-term rentals like Airbnb qualify?
Short-term rentals qualify when income is documented. We typically use a 12-month history from the platform statements or an AirDNA-style market report, averaged to a monthly figure and then compared with PITIA.
How much money do I need for reserves?
Plan on 3–6 months of PITIA in liquid reserves after closing. Higher leverage, cash-out transactions, and multiple financed properties push toward the six-month end of the range.
Can I take cash out with a DSCR loan?
Yes. Cash-out refinances are available, generally a few points below purchase leverage — commonly up to 75%. Seasoning of three to six months of ownership is typical before appraised value is used.
How fast can a DSCR loan close?
Most DSCR files close in two to three weeks once the appraisal is ordered. Clean files with an existing lease, entity documents, and an insurance binder ready can move faster.
Is there a prepayment penalty on DSCR loans?
Most DSCR programs carry a prepayment penalty, typically a 3-, 4-, or 5-year step-down. Buy-down options to shorten or remove the penalty are available in exchange for a slightly higher rate.
How many DSCR loans can I have at once?
There is no conventional four- or ten-property cap. Investors routinely finance unlimited properties, and portfolio structures can wrap several rentals into a single loan.
Are interest-only DSCR loans available?
Yes. Interest-only options run for the first several years and lower the monthly payment, which raises the calculated DSCR and can unlock higher leverage on tighter-cash-flow properties.
Do DSCR loans require an appraisal?
Yes. A standard appraisal is required, and for rentals it usually includes a 1007 market rent schedule so the lender can verify rents when a lease is absent or below market.
Can a foreign national get a DSCR loan?
Yes. Foreign national investors qualify with a passport, a US entity or ITIN, reserves held in a US account, and typically a lower maximum LTV than US-credit borrowers.
Ready to price your rental?
Send the address and lease — we'll return DSCR, leverage, and an indicative rate.
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