DSCR loans. Rental income, not personal tax returns.
A DSCR loan is a mortgage for a rental property. Instead of your personal tax returns, W-2s or pay stubs, the lender compares the rent the property brings in with its monthly housing payment. Purchases, refinances, LLC closings and select short-term rentals all qualify, and select programs carry no minimum ratio at all.
Built for investors: self-employed owners whose tax returns understate what they really earn, buyers who have hit the property limit on conventional financing, and anyone buying or refinancing in an LLC. Tell us about the property, we shop it across our lender network, and we come back with the options it fits and what each one costs.
Who it's for
A fit if you're…
Self-employed, with tax returns that show low taxable income after write-offs
Buying a property where the rent does not fully cover the payment and conventional or ratio-gated lenders have declined it
Already at the conventional limit on financed properties
Buying or refinancing in an LLC for liability separation
Acquiring a short-term rental and need projected income to qualify
Exiting hard money or a bridge loan into long-term fixed financing
No personal tax returns, W-2s, or pay stubs
No personal income documents and no DTI calculation. Credit, assets and reserves, and the property's rent are what get verified.
Unlimited financed properties
Each property stands on its own cash flow, so the portfolio is not capped the way conventional financing caps it.
Closes in an LLC
Vest title and debt in the entity, with a personal guaranty. Standard on these programs rather than an exception.
Purchase, refi, or cash-out
Buy the next door, pull equity out of a stabilised rental, or refinance out of short-term debt.
Short-term rentals allowed
Many lenders will underwrite an Airbnb or VRBO on a market-rent schedule or documented platform revenue.
30-year fixed available
Interest-only and ARM structures exist too, but a 30-year fixed is available on most DSCR programs.
A DSCR file is underwritten on what this property collects, not on the owner's tax returns.
DSCR calculator
Will the rent carry the loan?
Target ratio in use: 1.00. Several programs have no minimum DSCR at all up to 75% LTV.
Seeded with a $400,000 rental at 25% down. Change any input - the ratio, the max loan the rent supports, and the APR all recalculate. Set the target to no minimum to size a no-ratio DSCR loan.
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$100k$2M
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Loan amount: $300,000
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4%12%
yrs
10 yrs40 yrs
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$0$40k
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$0$20k
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$0$1,500
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$500$15k
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0%25%
Most DSCR lenders use gross market rent (0%). Add a haircut to stress-test.
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$0$60k
Defaults to 2% of the loan and follows it until you set a value. Drives the APR.
Set this to the ratio your lender wants, or choose no minimum to size a no-ratio loan.
DSCR
1.24
At or above your 1.00 target
APR
7.454%
Note rate 7.25% · Based on the points and fees you entered. Excludes third-party closing costs that are not finance charges.
Loan amount
$300,000
Principal & interest
$2,047 / mo
Taxes, insurance & HOA
$700 / mo
Total PITIA
$2,747 / mo
Qualifying rent
$3,400 / mo
Monthly cash flow before reserves
+$653
Max loan at your target DSCR (1.00)
$395,792
Capped by 80% max LTV
$320,000
Practical loan ceiling
$320,000
Terms of repayment
30 years, fixed, 360 monthly payments
The lower of the two is your practical ceiling. Most DSCR programs cap purchase LTV at 80%, and no-minimum-DSCR programs generally cap it at 75%.
For illustration only. Not a commitment to lend, a rate lock, or an offer of credit. Rates, DSCR requirements, taxes, insurance, and rents vary by lender, property, and market. Your actual terms are determined after application and full underwriting.
What DSCR actually measures
DSCR is the ratio of the property's qualifying monthly rent to its full monthly payment: principal, interest, taxes, insurance, and HOA. A 1.00 means rent exactly covers the payment. A 1.25 means the rent covers it with 25% to spare. That single number replaces the entire personal-income side of a conventional file, and on several programs it is not a qualifying test at all. The DSCR calculator computes it from the rent, price, taxes, and insurance in a few seconds.
No minimum DSCR at all on several programs up to 75% LTV, including a DSCR below 1.0
1.00 and above - broadly available, and where most standard pricing sits
1.25 and above - generally the best pricing tier
The tiers are about pricing and maximum leverage, not about whether you qualify
Rent comes from the lease, or from the appraiser's market-rent schedule (Form 1007) when the unit is vacant
Select programs in our lender network carry no minimum DSCR at all up to 75% LTV, so a rental whose rent does not fully cover the payment is still financeable. What you trade is leverage and pricing rather than eligibility, and above 75% LTV a lender-specific floor applies again. The detail sits on no-ratio DSCR loans, including what the trade costs and what still gets checked.
These are the ranges seen across investor programs. They are not an offer, and the specific combination available to you depends on the property, the ratio, your credit, and the lender we place the file with.
Down payment: 20-25% on purchase, 25%+ on cash-out refinance
Credit score: from 620 with some lenders in our network, with the strongest pricing at 740+
Loan amounts: up to $5,000,000 depending on the program and property
Structures: 30-year fixed, interest-only, 5/6 and 7/6 ARMs
Prepayment penalties are common on DSCR loans - typically a 3-5 year step-down, and often buyable
We do not publish a rate, because a DSCR rate is built from your file rather than posted on a board, and it moves with the market daily. What we can tell you is what moves it. Pricing generally runs above a comparable conventional investment-property loan, and origination costs are higher. For an investor who is scaling, closing in an entity, or writing off aggressively on Schedule E, that premium buys qualification conventional underwriting will not give, which is the trade being made. These are the levers, roughly in the order they matter:
Credit tier: the strongest pricing sits at 740 and above, and each tier down costs something
Leverage: a lower loan-to-value prices better, which is why more down payment often pays for itself
Ratio tier: files at 1.25 and above price best, 1.00 and above are standard, and a no-minimum-DSCR file prices above both
Property type: a single-family rental prices better than a 2-4 unit, a condo, a condotel or a short-term rental
Prepayment structure: a longer prepay period lowers the rate, and buying the prepay down or out raises it
Loan size and occupancy history also matter, and every lender weights all of this differently, which is the reason to shop the file
If the ratio matters on the program you are pricing, there are several levers, and they are worth pulling in this order because the first two cost the least. If none of them get you there, a no-ratio program at lower leverage usually will.
Increase the down payment - lowers the payment and lifts the ratio directly
Buy the rate down with points - lowers principal and interest
Choose an interest-only structure - lowers the qualifying payment on many programs
Shop insurance - on Florida coastal property this line item can swing the ratio on its own
Re-examine the rent - an outdated Form 1007 or a below-market lease understates the numerator
8Twelve Mortgage US Inc. arranges DSCR financing in Florida and Texas. Both are among the most active investor markets in the country, and each has state-specific mechanics worth reading before you write an offer. See Florida DSCR loans for how insurance decides the ratio, and Texas DSCR loans for how the property-tax load does. If the property is let nightly, see short-term rental loans. If you are self-employed and buying a home of your own, bank statement loans and no income verification mortgages use other documents in place of tax returns, and foreign national mortgages need no US credit file on select programs.
Prepayment penalties are standard on DSCR loans. If you plan to sell or refinance inside three years, price the buy-out before you close.
Reserves are a real underwriting hurdle - budget 3-6 months of PITIA in liquid funds on top of the down payment.
Insurance and property taxes sit inside the DSCR calculation. A quote that lands 40% above your estimate can pull the ratio under 1.00, which usually moves the file to a no-ratio program at lower leverage rather than ending it.
Closing in an LLC does not remove your personal guaranty, and it does not by itself provide legal or tax protection. Talk to your attorney and CPA.
A market-rent schedule that comes in below your projection is the most common reason a DSCR file has to be restructured.
FAQ
Questions buyers actually ask
What is a DSCR loan?+
A DSCR (debt service coverage ratio) loan is an investment-property mortgage qualified on the property's rental income rather than the borrower's personal income. The lender divides the qualifying rent by the property's full monthly payment - principal, interest, taxes, insurance, and HOA - and lends based on that ratio.
How is DSCR calculated?+
DSCR = qualifying monthly rent divided by monthly PITIA. If a property rents for $3,400 and PITIA is $2,950, the DSCR is 1.15. A ratio of 1.00 means the rent exactly covers the payment.
What DSCR do lenders require?+
Many programs have no minimum DSCR requirement at all up to 75% LTV, so the rent does not have to cover the full payment. The 1.00 and 1.25 tiers you see quoted affect pricing and maximum leverage rather than eligibility. Where a minimum does apply it is lender-specific and set at the time of application.
Is there a no-ratio DSCR loan?+
Yes. Select lenders in our network offer no-ratio DSCR loans, with no minimum DSCR at all up to 75% LTV, so the rent does not have to cover the full payment. Our no-ratio DSCR loans page covers the leverage, pricing and documentation in full.
Can I get a DSCR loan with a 620 credit score?+
Yes, some programs in our lender network start at 620. Expect lower maximum leverage and higher pricing than a 740+ file, and plan on documented reserves. The strongest DSCR pricing sits at 740 and above.
Is there a minimum loan amount on a DSCR loan?+
We do not publish a floor. Minimums are set by the individual lender and the property, and small-balance loans generally price higher. Send us the deal and we will tell you which programs it fits.
Can foreign nationals get a DSCR loan?+
Yes. Foreign national DSCR financing exists on several programs, typically with a larger down payment, reserves held in a US account, and alternative credit documentation in place of a US credit score. Closing in a US LLC is common on these files.
Do DSCR loans cover 5-8 unit or mixed-use properties?+
Some programs do. 5-8 unit residential is available on investor programs outside the 1-4 unit agency box, and mixed-use is possible when the commercial component is under 50% of the square footage or income. Terms are lender-specific.
Can I buy out the prepayment penalty?+
Usually. Most DSCR programs let you buy the prepay down or out for a fee or a higher rate. If you expect to sell or refinance within three years, price the buy-out before you lock rather than after.
Do DSCR loans require tax returns or proof of income?+
No. There are no tax returns, W-2s, pay stubs, or DTI calculation. Lenders still verify credit, assets for down payment and reserves, and the rent through a lease or an appraiser's market-rent schedule (Form 1007).
Can I close a DSCR loan in an LLC?+
Yes, and most investors do. Vesting title and the debt in an LLC keeps the property separate from your personal balance sheet. Expect the lender to require a personal guaranty and entity documents.
What is the down payment on a DSCR loan?+
Typically 20-25% on a purchase and 25% or more on a cash-out refinance. Lower leverage generally improves both the rate and the DSCR, because the payment drops.
How does a DSCR loan work?+
You give the lender the property rather than your pay history. The lender documents the rent, from the lease or the appraiser's market-rent schedule, works out the full monthly payment including taxes, insurance and HOA, and compares the two. Credit, funds to close and reserves are still verified. There are no personal tax returns, W-2s or pay stubs and no DTI calculation.
How do I qualify for a DSCR loan?+
Bring credit, a down payment of typically 20-25%, documented reserves, and a property with documented rent. The rent does not have to cover the payment: select programs carry no minimum DSCR at all up to 75% LTV. Credit from 620 is available on some programs, with the strongest pricing at 740 and above.
Is a DSCR loan a conventional loan?+
No. Conventional loans follow Fannie Mae and Freddie Mac guidelines and underwrite your personal income and debt-to-income ratio. A DSCR loan is a non-QM investor loan underwritten on the property's rent instead, which is why there is no DTI calculation and no cap on financed properties. Pricing is generally higher than conventional as a result.
Are DSCR rates higher than conventional rates?+
Yes - generally on the order of 0.75% to 1.5% above a comparable conventional investment-property rate, plus higher origination costs. Pricing depends on DSCR, LTV, credit score, property type, and the lender. The trade-off is qualification, speed, and no limit on the number of financed properties.
Is there a limit on how many DSCR loans I can have?+
No. Conventional financing caps most investors at ten financed properties. DSCR programs underwrite each property on its own cash flow, so the portfolio can keep growing.
Do DSCR loans work for short-term rentals?+
Yes, on many programs. Our short-term rental and Airbnb loans page covers how nightly revenue is documented and priced.
Can I refinance an existing rental into a DSCR loan?+
Yes. Rate-and-term and cash-out DSCR refinances are both common, including moving a property out of hard money or a short-term bridge loan into 30-year fixed financing.
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