No-ratio DSCR loans. Finance a rental the rent doesn't fully cover.
A no-ratio DSCR loan is a mortgage on a rental property with no minimum debt service coverage ratio on select programs. The lender still appraises the property and still documents the rent, but the rent does not have to cover the full monthly payment. It is typically available up to 75% loan-to-value, with credit from 620 on some programs.
This is the program for the deal that a lender turned down over cash flow: a high insurance premium, a heavy tax bill, a seasonal short-term rental, or rents that have not caught up yet. Send us the address and the rent, and we shop it across our lender network and show you the options it fits.
Who it's for
A fit if you're…
Holding a rental where the rent does not quite cover the payment
Buying in a market where insurance or property tax eats the monthly payment
Financing a short-term rental with seasonal income
Buying for long-term appreciation rather than day-one cash flow
Improving a property before rents are stabilised
Already declined by a lender that requires a minimum ratio
The ratio is not a qualifying test
On select programs there is no minimum DSCR up to 75% LTV, so negative cash flow on paper is not a decline.
No personal tax returns, W-2s or pay stubs
Like any DSCR loan, the file is built around the property rather than your personal income.
Rent still documented
From the signed lease, or the appraiser's market-rent schedule when the unit is vacant.
LLC vesting available
Close in an entity with a personal guaranty, the same as a standard DSCR file.
Purchase or refinance
Buy a new rental, or refinance one out of hard money or a bridge loan.
40+ lender network
Only some lenders offer a no-minimum-ratio program, which is exactly what a broker is for.
What a no-ratio DSCR loan is
On a rental property loan, lenders often compare the monthly rent with the property's total monthly housing payment, which includes principal, interest, taxes, insurance and any HOA dues. That comparison is the debt service coverage ratio. If the rent is $2,000 and the payment is $2,000, the ratio is 1.00. If the rent is lower than the payment, the ratio is under 1.00. On a standard program the rent has to reach a set level to qualify. A no-ratio program simply does not apply that test, because the lender is relying on the property value and your down payment instead. For the mechanics of the standard version, read how DSCR loans work.
The ratio compares monthly rent with the full monthly payment, including taxes, insurance and HOA
A ratio under 1.00 simply means the rent does not cover the whole payment
On select programs there is no minimum ratio at all, up to 75% loan-to-value
The lender leans on the appraised value and your equity rather than on the cash flow
These are the files we see most often, and this is the single most common reason an investor declined elsewhere over cash flow still closes with us. In each case the property is sound and the rent is real; it just does not clear a lender's cash-flow bar. Florida DSCR loans and Texas DSCR loans have their own pages, because in those two states one line of the payment usually decides the ratio.
A Florida property where the insurance premium takes up most of the payment
A Texas property where the property tax bill does the same
A short-term rental whose income is seasonal and looks thin in slower months
A property bought mainly for long-term appreciation rather than day-one cash flow
A property being improved, where rents have not been raised to market yet
A file a lender already declined because it required a minimum ratio
Being straight about this matters more than selling it. Skipping the ratio test costs you something, and it is worth knowing what before you write an offer. You will generally be held to lower leverage, typically 75% loan-to-value or less, so you bring more cash to the table. Pricing is typically higher than on a file where the rent comfortably covers the payment. Reserves are still required, so you need money left over after closing. And if you want leverage above 75%, a lender-specific minimum ratio comes back into play.
Lower leverage: typically 75% loan-to-value or less, so roughly 25% down or 25% equity retained
Pricing typically higher than a file where the rent comfortably covers the payment
Reserves still required, and they vary by lender and property count
Above 75% loan-to-value, a lender-specific minimum ratio applies again
Prepayment penalties are common on investor programs, so price the buy-out if you may sell early
This is not a no-questions-asked loan, and nobody should walk into it expecting one. There are no personal tax returns, W-2s or pay stubs in the file, but there is still a file.
An appraisal of the property, which sets the value the loan is sized against
The rent, documented by the signed lease or the appraiser's market-rent schedule
Credit, with a score from 620 available on some programs
Funds to close and reserves, verified from statements
Entity documents if you close in an LLC, plus a personal guaranty
Insurance, and flood coverage where the property requires it
8Twelve Mortgage US Inc. arranges investor financing in Florida and Texas. Both pages walk through the one line of the payment that most often decides a ratio in that state, and you can model your own address in the DSCR calculator before you talk to anyone.
Lower leverage means more cash at closing. Plan on roughly 25% down on a purchase, and 25% equity retained on a refinance.
Pricing is typically higher than on a file where the rent comfortably covers the payment.
Above 75% loan-to-value, a lender-specific minimum ratio applies again.
Reserves are still required after closing, and the amount varies by lender and by how many properties you hold.
Prepayment penalties are common on investor programs. Price the buy-out if a sale or refinance inside a few years is likely.
Terms, credit minimums and leverage vary by lender and property, and nothing here is a commitment to lend.
FAQ
Questions buyers actually ask
What is a no-ratio DSCR loan?+
It is a mortgage on a rental property where the lender does not apply a minimum debt service coverage ratio. The ratio compares the rent with the property's full monthly payment. On a standard program the rent has to reach a set level. On a no-ratio program, available on select lenders in our network, that test is not applied, so the rent does not have to cover the full payment.
Is there really no minimum ratio?+
On select programs, yes, up to 75% loan-to-value. It is a program feature, not a universal rule, and it is not a shortcut around underwriting. The property is still appraised, the rent is still documented, and your credit and reserves are still reviewed. Above 75% loan-to-value a lender-specific minimum ratio applies again.
What loan-to-value can I get?+
Typically up to 75% on a no-ratio program, which means roughly 25% down on a purchase or 25% equity left in place on a refinance. Some files price better at lower leverage. Exact limits vary by lender, property type and credit profile.
What credit score do I need?+
Credit from 620 is available on some programs. A higher score generally improves pricing and the leverage a lender will offer. There is no credit pull to start a conversation with us; a credit check happens later, with your permission, when you formally apply.
How much higher is the rate?+
Pricing on a no-ratio file is typically somewhat higher than on a file where the rent comfortably covers the payment, because the lender is taking more risk on the cash flow. We cannot quote a spread here, since it moves with the market, the leverage and the file. We shop it across our lender network and show you the actual numbers side by side.
Does the rent still have to be documented?+
Yes. The rent comes from the signed lease when the property is tenanted, or from the appraiser's market-rent schedule when it is vacant. What changes on a no-ratio program is the qualifying test, not the documentation.
Can I use one on a short-term rental?+
Many programs allow short-term rentals, which is one of the more common uses, because nightly income is seasonal and can look thin in the months a lender samples. Confirm the local short-term rental rules for the address, since some cities license or restrict them.
Can a foreign national use one?+
Financing for foreign nationals is available on select programs, typically at lower leverage and with additional documentation such as a passport and proof of funds. Terms vary by lender.
Can you get a DSCR loan with negative cash flow?+
Yes, on select programs. Negative cash flow on paper means the rent does not cover the full monthly payment, which is exactly the file a no-ratio program is built for: there is no minimum ratio to fail, typically up to 75% loan-to-value. The property is still appraised, the rent is still documented, and your credit and reserves are still reviewed. What you trade is leverage and pricing rather than eligibility.
What happens above 75% loan-to-value?+
A lender-specific minimum ratio comes back into play. If you need leverage above 75%, the rent generally has to reach the lender's floor. That is the main trade on this product: you can skip the ratio test, or you can push leverage, but usually not both.
Send us the rent and the address.
A 3-minute application. No credit pull to start. A rate estimate from a broker shopping 40+ lenders for you.
