A DSCR (Debt Service Coverage Ratio) loan is a type of investment property loan that qualifies borrowers based on the rental income of the property rather than their personal income. The DSCR is calculated by dividing the property's net operating income by its total debt service.

Most lenders prefer a DSCR of 1.0 or higher, though some programs accept ratios as low as 0.75 and a few offer "no ratio" loans. A DSCR of 1.0 means the property's income exactly covers the debt payments, while anything above 1.0 indicates positive cash flow.

No! That's one of the main benefits of DSCR loans. You don't need to provide personal income documentation like tax returns, W-2s, or pay stubs. The qualification is based solely on the property's rental income potential.

DSCR loans are available for single-family homes, 2–4 unit properties, condos (warrantable and non-warrantable), condotels, 5–10 unit residential buildings, mixed-use properties with limited commercial space, and rural properties.

DSCR loans are available up to $3 million, making them suitable for a wide range of investment properties from starter rentals to high-value investment opportunities.

DSCR loans can close in as little as 7 days once the appraisal is completed. The streamlined documentation process allows for much faster closings compared to traditional investment property loans.

Down payment requirements vary by lender and loan program, but typically range from 15-25% for DSCR loans. Some programs may offer higher leverage options depending on the property and borrower profile.

Yes! DSCR loans are available for both purchases and refinances. This includes cash-out refinancing to access equity for additional investments, property improvements, or any other use.

No prior real estate investment experience is required for DSCR loans. These programs are designed to be accessible to both seasoned investors and those just starting their investment journey.

Rental income is typically determined using an appraisal with a rent schedule, market rent analysis, or existing lease agreements. For Airbnb properties, lenders may use historical income data or market analysis for short-term rental potential.

Most DSCR loans have a prepayment penalty for the first few years. Shorter or no-penalty options may be available, usually at a higher rate or cost. We’ll help you choose the option that best fits your investment strategy.

Most DSCR loan programs require a minimum credit score of 620-640, though some lenders may have higher requirements. Programs are available for the lowest possible scores, provided there is enough equity in the property. Better credit scores typically result in more favorable interest rates and terms.