DSCR loans · For real estate investors
Let the rent qualify the loan.
A DSCR loan qualifies on the property’s rental income instead of your personal income, so the loan itself usually needs no tax returns. Built for investors buying or refinancing rentals, short-term rentals included.
What to know.
The essentials, in plain English.
- Qualify on the property
- The lender compares the rent with the property’s monthly costs instead of reading your pay stubs.
- Usually no tax returns
- Your personal returns usually aren’t needed, because the property’s income is what qualifies the loan.
- Grow past your personal income
- Each property qualifies on its own rent, so your next purchase isn’t held to the debt-to-income math of a conventional loan.
- Investor-minded guidance
- Your loan officer runs the rent, taxes, insurance and dues with you before you commit, and many investors can close in their LLC’s name.
What happens after you press the button.
- Your loan officer reaches out
- Charles reads what you send personally and gets in touch to talk it through.
- What you’ll talk about
- The property, its rent or expected rent, its costs, and whether you’re buying in your name or an LLC’s.
- What to have handy
- The property’s address, its lease or expected rent, and its taxes, insurance and dues if you have them.
Who it fits
Investors who want a property to stand on its own income.
- Investors buying rental homes
- Owners refinancing a rental
- Short-term rental owners
- Self-employed investors whose tax returns understate their income
What you’ll need
The property does most of the work. Your loan officer confirms the rest.
- The lease, or a rent estimate from the appraiser
- Your credit history
- Proof of reserves
- Your LLC documents, if you’re buying in its name
Common questions
What is a DSCR?
The debt service coverage ratio: the property’s rent divided by its monthly mortgage costs. Above 1 means the rent covers the costs.
Do I need tax returns?
Usually not for the loan itself, because the property’s income qualifies it. Expect to show the lease or a rent estimate, your credit and your reserves.
DSCR or a conventional investment loan?
A conventional investment loan uses your personal income and tax returns and is often priced lower. A DSCR loan qualifies on the rent instead. Your loan officer can compare both for your property.
Can I use a DSCR loan for a short-term rental?
Many programs accept short-term rental income, using the property’s rental history or a market rent estimate. Your loan officer can check which programs fit your property.
Can I buy in my LLC’s name?
Many DSCR loans let you take title in your LLC’s name, usually with a personal guarantee from you.
Can I live in the property?
No. DSCR loans are for investment properties only, not the home you live in.
What if the rent doesn’t cover the costs?
Some programs still lend when the ratio is below 1, usually with more reserves or a larger down payment. Your loan officer can show you the options.
How much do I need for a down payment?
Investment property loans usually ask for more down than a loan on the home you live in. It depends on the program, the property and your credit.
Will checking my options affect my credit?
Answering a few questions doesn’t check your credit. A credit check comes later, only with your permission, and your loan officer can explain how it may affect your score.
What does a DSCR loan cost?
DSCR loans are usually priced higher than loans on the home you live in, with the usual closing costs and an appraisal that includes a rent estimate. Your loan officer lists every cost before you commit.
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Buy the next rental
on its own numbers.
Bring Charles your next property, and run its numbers together before you commit.
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