DSCR Loans (Debt Service Coverage Ratio)
Financing options for eligible real estate investors who may qualify based on the property's rental income rather than relying solely on traditional personal income documentation.
Run the numbers on your rental
Enter the loan, the property's monthly costs and its rental income. The calculator estimates the payment, the total monthly debt service and the property's DSCR, then compares it with the minimum ratio you enter. Results update as you type.
Let the property's income do the talking
With a DSCR loan, the main question is whether the property's rent covers its monthly housing payment. Instead of focusing on your tax returns and pay stubs, the lender compares the property's rental income with its payment to calculate a debt service coverage ratio.
That can make DSCR loans a good fit for investors with complex tax returns, multiple properties, or income that's hard to document the traditional way.
DSCR = monthly rental income ÷ monthly housing payment
The housing payment usually includes principal, interest, property taxes, insurance and any HOA dues. A ratio of 1.0 means the rent exactly covers the payment; above 1.0 means the rent covers more than the payment. The minimum ratio and how rent is measured depend on the program and lender.
Is a DSCR loan right for you?
- Portfolio investorsInvestors who own several rentals and want qualifying based on each property's numbers.
- Self-employed investorsBorrowers whose tax returns show write-offs that lower their documented income.
- Purchase or refinanceAvailable for buying a rental or refinancing one, including cash-out options on some programs.
- LLC borrowersSome DSCR programs may allow the loan to close in an LLC's name.
- Long-term rentalsRent may be documented with a lease or an appraiser's market rent estimate, depending on the program.
- Short-term rentalsSome programs may consider short-term rental income; eligibility and documentation vary.
DSCR loans are for investment properties only, not homes you'll live in. Credit, down payment, reserves and the property itself are still reviewed. Eligibility is subject to underwriting and applicable lender requirements.
DSCR loan FAQ
Do I need to show my personal income?
DSCR programs generally focus on the property's rental income instead of your personal income documents. You'll still provide information such as credit, assets for the down payment and reserves, and details about the property.
What if the rent doesn't fully cover the payment?
Some programs may allow a ratio below 1.0 with different terms, while others require a higher ratio. Let's run the numbers on your property together and see what's possible.
Can I use a DSCR loan for a vacant property?
Many programs can use an appraiser's estimate of market rent when there's no current lease. Requirements vary by lender.
Have a rental in mind? Let's run the DSCR numbers.
Send me the property address, expected rent and your goals, and I'll help you understand your options.
Subject to eligibility, underwriting and applicable lender requirements. This is not a commitment to lend.