DSCR Loans for Rental Property Investors
Finance rental property based on what it earns, not what you earn. No W-2s, no tax returns — just the property's rent versus its payment.
- Qualify on rent, not personal income
- 30-year fixed, ARM, and interest-only options
- Up to 80% LTV on purchases, 75% cash-out
- Close LLCs and portfolios with no income docs
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A DSCR loan is the cornerstone of modern rental investing. Instead of underwriting you — your pay stubs, tax returns, and debt-to-income ratio — a DSCR lender underwrites the property's cash flow. If the rent covers the payment, the deal works.
The qualifier is the debt-service-coverage ratio (DSCR): the property's gross monthly rent divided by its full monthly payment, or PITIA.
DSCR = Gross Monthly Rent ÷ PITIA
A DSCR of 1.0 means the property exactly covers its payment; 1.25+ is the strongest pricing tier; and below 1.0 is still financeable through low-DSCR or no-ratio programs. Run your own numbers with our DSCR calculator.
Why investors use DSCR loans
- No income documentation. No W-2s, no tax returns, no employment verification. Ideal for self-employed investors, full-time landlords, and anyone whose returns show low taxable income after write-offs.
- Built for LLCs and portfolios. Title the property in your LLC and keep building — there's no limit on the number of conventional mortgages dragging you down at four or ten properties.
- The 'R' in BRRRR. DSCR is the standard cash-out refinance for the Buy-Rehab-Rent-Refinance-Repeat strategy. Buy and rehab with hard money, then refinance into a long-term DSCR loan to recover capital.
- Speed and simplicity. Far fewer documents than a conventional loan means a faster, cleaner process.
How DSCR loan pricing works
Three factors drive your rate and leverage:
- DSCR — higher coverage = better pricing. 1.25+ unlocks the best tier.
- LTV — lower leverage = lower rate. 80% is the typical ceiling on a purchase.
- Credit score — DSCR is asset-based, but FICO still tiers your rate. 720+ prices best; most programs start around 660–680.
See current ranges on our DSCR loan rates page, and the full qualification checklist in DSCR loan requirements.
A worked example
A $300,000 rental that brings in $2,600/month, financed at 75% LTV ($225,000) at 7.25% over 30 years:
| Line | Amount |
|---|---|
| Principal & interest | ~$1,535/mo |
| Taxes + insurance + HOA | ~$650/mo |
| PITIA | ~$2,185/mo |
| Gross rent | $2,600/mo |
| DSCR | 1.19 (standard tier) |
That deal qualifies comfortably. Push leverage higher or rent lower and DSCR slips toward 1.0 — which is exactly why investors model the ratio before they make an offer.
Business-purpose only
Real Lending's DSCR loans are business-purpose loans on non-owner-occupied investment property. They are not consumer mortgages and cannot be used for a primary residence. Available nationwide, with state-specific licensing notes on our state pages.
DSCR loans by state
Market context, typical rates, and any business-purpose licensing notes for the states we cover most.
Frequently asked questions
What credit score do I need for a DSCR loan?
Most DSCR programs start around 660–680, with the best rates at 720+. Because the loan qualifies on the property's cash flow, credit tiers your rate and leverage rather than making or breaking approval, but a higher score meaningfully improves your terms.
Can I close a DSCR loan in an LLC?
Yes — closing in an LLC or LP is standard and encouraged for DSCR loans. It's one of the main reasons investors choose DSCR over conventional financing, which generally requires title in your personal name.
How is a DSCR loan different from a conventional mortgage?
A conventional mortgage underwrites your personal income, debt-to-income ratio, and employment. A DSCR loan underwrites the property's rent versus its payment. No tax returns or W-2s are required, there's no cap on the number of properties, and you can vest title in an LLC.
Do DSCR loans have prepayment penalties?
Usually yes — a step-down prepay (commonly 5-4-3-2-1 over five years) is standard, because it's part of what keeps the rate competitive. You can often buy the prepay down or out for a higher rate if you expect to sell or refinance soon.
Can I get a DSCR loan on a short-term rental (Airbnb)?
Many DSCR lenders finance short-term and vacation rentals, using either market long-term rent or a documented short-term rental income figure (such as an AirDNA or 12-month statement) to compute DSCR. Programs and leverage vary, so confirm the approach for your specific property.
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