Qualify on the property's rental income, not yours.
DSCR loans (Debt Service Coverage Ratio) qualify real estate investors based on the rental income the property generates rather than the investor's personal income. No tax returns. No W-2s. No DTI calculation. If the rent covers the payment, the deal qualifies.
DSCR stands for Debt Service Coverage Ratio. It's calculated as the property's monthly rental income divided by the monthly PITIA payment (Principal, Interest, Taxes, Insurance, Association dues). A 1.0 DSCR means rent equals the payment. Most lenders require 1.0 or higher to qualify, though some allow sub-1.0 DSCR with higher down payment or reserves.
Single-family, 2-4 unit, condo. 20-25% down, 1.0 DSCR minimum, 30-year fixed.
Sub-1.0 DSCR programs available with higher down payment (25-30%) or stronger credit and reserves.
Qualifies on projected short-term rental income using AirDNA or third-party rent estimates.
Pull equity from existing rentals to expand the portfolio. Up to 75-80% LTV.
Loan amounts up to $3M+ for high-end rentals and multi-property investors.
Available for investors purchasing their first investment property with DSCR financing, with proof of cash reserves.
Finance multiple properties under a single program.
620 minimum on most programs. 680+ for best pricing.
20-25% on single-family. 25-30% on 2-4 unit. Higher for short-term rental in some markets.
1.0 minimum on standard programs. Sub-1.0 available with adjustments.
6 months PITIA per property typical. Verified in liquid accounts.
Single-family, 2-4 unit residential, warrantable condo, and short-term rental units.
No tax returns. No W-2s. No employment verification. Lease or rent estimate required.
Common questions on dscr loans for real estate investors, answered by Ken Clark Jr., Certified Mortgage Advisor.
A DSCR (Debt Service Coverage Ratio) loan qualifies real estate investors based on the property's rental income rather than the borrower's personal income. If rental income equals or exceeds the property's PITIA payment, the borrower qualifies. No tax returns or W-2s required.
Most lenders require a 1.0 DSCR or higher (rental income equals or exceeds the mortgage payment). Some programs allow sub-1.0 DSCR (0.75 to 0.99) with higher down payment or stronger compensating factors.
Yes. Short-term rental DSCR programs qualify the property using projected nightly rental income, typically verified through AirDNA or similar third-party services. Some markets have higher down payment requirements for STR.
Most DSCR programs require 620 minimum. Best pricing at 680+. Lower scores may be approved with higher down payment and reserves.
Typically 20-25% on single-family rentals, 25-30% on 2-4 unit, and 30%+ on short-term rentals in some markets. Down payment can come from any documented source including business funds or 1031 exchange proceeds.
Yes, many DSCR programs allow first-time investors. Verified cash reserves (typically 6 months PITIA) and a stronger credit profile help when there's no prior landlord experience.
No. That's the entire point of the program. The property's rental income carries the qualification. Personal income, tax returns, employment, and DTI are not factors.
Yes. DSCR cash-out refinances allow up to 75-80% LTV. Many investors use cash-out DSCR to pull equity from a stabilized rental to fund the next acquisition.
Certified Mortgage Advisor and Branch Manager at PRMG Mortgage (NMLS #75243). 28 years in mortgage lending. Specializes in FHA, VA, conventional, DPA, jumbo, Non-QM, renovation, and construction financing for buyers and investors in Sacramento, New Jersey, and nationwide. PRMG is licensed in 49 states, excluding New York. Three-time Gold Award winner for Highly Reviewed Mortgage Team in Sacramento (2023, 2024, 2025). NMLS #225375.
Verify Ken's license at NMLS Consumer Access · Read client reviews · Schedule a call
Source materials are publicly available agency and government resources. Program availability and guidelines may change. Always verify current guidelines with the agency or with Ken Clark Jr. before relying on them for a transaction.
Sources consulted: HUD.gov, VA Home Loans, CalHFA, GSFA, NJHMFA, Freddie Mac DPA One, Down Payment Resource, NMLS Consumer Access.
All program references on this page are based on publicly available agency guidelines as of the last-reviewed date. Program availability and guidelines may change. PRMG must be approved for a program before originating it. Final eligibility depends on credit, income, assets, property, occupancy, and underwriting.