DSCR / Investor Loans

DSCR (Debt Service Coverage Ratio) loans are designed for real estate investors who want to qualify based primarily on a property’s cash flow rather than their personal income. These programs are commonly used for rental properties and allow investors to continue building portfolios without the same documentation required for traditional mortgages.

Instead of focusing on your employment and tax returns, lenders look at whether the property’s expected rent is sufficient to cover the mortgage payment. This makes DSCR loans appealing to investors with multiple properties, complex income, or limited traditional documentation.

How DSCR loans work

With a DSCR loan, the lender evaluates:

• estimated or actual monthly rent
• mortgage payment (principal, interest, taxes, insurance, HOA if applicable)

Then they calculate:

DSCR = Rent income ÷ Housing expense

A DSCR of 1.0 or higher normally indicates the property can support the payment, but exact program requirements vary by lender.

DSCR loans are typically used for:

• long-term rental properties
• short-term and vacation rentals (Airbnb/VRBO)
• portfolio expansion
• refinancing existing investment properties
• cash-out for reinvestment

These loans are generally not used for primary residences or second homes.

Benefits of DSCR loans

• qualification based more on property income than personal income
• often no tax returns or W-2 income required
• can work well for investors with complex financial structures
• allows continued property acquisition and scaling portfolios

Program details vary by lender and investor experience, but the overall goal is flexibility for real estate investing.

General documentation commonly requested

While DSCR loans are typically more flexible, you should still expect to provide:

• identification (driver’s license, passport, etc.)
• entity documents if purchasing under LLC/corporation
• bank statements for assets and reserves
• lease agreement or estimated market rent documentation
• appraisal showing market rent or rental survey
• mortgage statements for other properties (if applicable)
• insurance information when available

Some lenders may also ask for limited income details even if not used to qualify. Requirements vary by program.

Is a DSCR loan right for me?

A DSCR or investor loan may be a good option if you:

• own or plan to purchase rental property
• prefer qualification based on property cash flow
• have complex or hard-to-document income
• are scaling a real estate portfolio

Program Guidelines and Eligibility Considerations

We’re happy to answer questions and review your options. Loan program availability and guidelines can change, and not every borrower or property will meet every program requirement. We’ll help you explore what fits your goals and go through documentation step by step.