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EXPLORE DSCR LOAN FAQs

DSCR LOANS

(Debt Service Coverage Ratio)

Designed for Real Estate Investors

A DSCR loan evaluates the property's Debt Service Coverage Ratio, focusing on its income potential and cash flow to determine eligibility. This method benefits investors seeking efficient financing solutions without the need for extensive personal income documentation.

To determine the property's income potential, the lender orders a standard residential appraisal, along with a Market Rental Analysis Report which provides market rent data for similar homes in the surrounding marketplace.

GROSS MONTHLY RENTS ÷ TOTAL HOUSING PAYMENT*

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Run your own scenarios using our

DSCR CALCULATOR »

✅ HOW TO QUALIFY FOR A DSCR LOAN

To qualify for a DSCR Loan, applicants must have the following:

 

  • DOWN PAYMENT: 20% for single-unit homes. For 2-4 unit multi-family homes, the minimum down payment is 25%.

  • Credit Score Criteria: A minimum FICO score of 550. Scores below 700 may influence loan-to-value ratios and down payment requirements.

  • Primary Home Experience: A verifiable 12-month payment history for primary residence is essential. Renters may qualify with documented payment history from institutional landlords.

NOTE: Non-institutional landlords or applicants "living with family" (with or without housing expenses) are ineligible.

  • Credit Tradelines: At least three active credit tradelines in the past 12 months, or two active tradelines in the past 24 months.

  • DSCR Ratio Requirements: The property should have a minimum DSCR of 0.75 for purchase transactions and 1.00 for refinance transactions.

📌 * If the property being financed does not have a sufficient DSCR ratio, try our NO RATIO DSCR PROGRAM »

 

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👉 KEY PROGRAM HIGHLIGHTS:

 

  • Ideal for Real Estate Investors looking for an easier way to finance rental properties, without the hassle of conventional loans, or the high costs associated with hard money loans.

  • Investment Homes Only - owner occupancy is not permitted.

  • Fast Funding Process Most DSCR loan programs fund in 3-5 weeks.
  • Option for Cash-out refinancing for business and investment purposes

  • No Tax Returns or Personal Income needed to qualify

  • Qualification is based on the property's income potential using the DSCR formula.

  • Single-Unit Homes and 2-4 Multi-Unit Homes and 5-8+ Unit Properties

  • What Does DSCR Stand for? DSCR stands for Debt Service Coverage Ratio.  See the DSCR FORMULA »
  • For properties not meeting standard DSCR requirements, consider our No RATIO PRO Program »

 

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⚙️ What Are DSCR Loans?

🔢 How to Calculate DSCR

Our modern DSCR programs are similar to that of a commercial loan program; however our approach is much simpler, and the documentation and due diligence requirements are significantly easier.

The DSCR is calculated by dividing the property's gross monthly rental income by its total housing payment (PITIA: Principal, Interest, Taxes, Insurance, and Association Dues).

EXAMPLE:

Single family home generating $2,250/mo in rental income

New mortgage payment:  $1,800/mo (PITI)

DSCR Ratio: 1.25   ($2,250 ÷ $1,800 = 1.25)

* TOTAL HOUSING PAYMENT refers to the complete housing obligation, including Principle + Taxes + Insurance + Association Dues

THE DSCR FORMULA:

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WHAT WOULD YOU LIKE TO DO?

SELECT:

PURCHASE
A PROPERTY  

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REFINANCE
A PROPERTY  

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🔎 Find the Right DSCR Loan, Fast 🚀

🔀 NEED MORE FLEXIBILITY?

INTRODUCING

⚡POWER PACK ⚡

INNOVATIVE SPECIALTY DSCR SOLUTIONS FOR PROPERTY INVESTORS

CREDITQUICK 50
LOW Credit? High Equity?
NO PROBLEM. 👍

1 Unit | 2-4 Unit |  5-9+ Unit | Mixed-Use

Office | Retail | Warehouse | Self-Storage | Automotive

🔥 #1 TOP NEW PROGRAM

No RATIO PRO
DSCR with No Market Rent Restrictions – Invest Freely.

1 Unit | 2-4 Unit |  5-9+ Unit | Mixed-Use

⭐ TOP RISING NEW PROGRAM

COMMERCIAL SIMPLICITY

Commercial Financing Without the Red Tape.

Office | Retail | Warehouse | Self-Storage | Automotive

1 Unit | 2-4 Unit |  5-9+ Unit | Mixed-Use

REHAB PLUS+

Fix and Flip Financing Without the Hassle.

1 Unit | 2-4 Unit |  5-9+ Unit

SPRINT BRIDGE

Bridge Financing Without the Hassle or Hard Money Terms.

1 Unit | 2-4 Unit |  5-9+ Unit | Mixed-Use

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📣 FREQUENTLY ASKED QUESTIONS

  • What does DSCR stand for?

    DSCR stands for Debt Service Coverage Ratio, a metric used to assess a property's ability to cover its debt obligations through its income.

  • How is the DSCR calculated?

    DSCR is calculated by dividing the property's gross monthly rental income by the total housing payment (PITIA).

  • Can I qualify for a DSCR loan without personal income verification?

    Yes, DSCR loans allow qualification based on the property's income potential, eliminating the need for personal income documentation.

👉 FOR MORE FREQUENTLY ASKED QUESTIONS, CHECK OUT OUR DSCR FAQ PAGE »

👔 CLOSE IN THE NAME OF YOUR BUSINESS ENTITY

We allow you to close in the name of your business entity, such as an LLC, LLP, Corporation, S-Corporation, or LLLP.  This approach can offer significant liability protection and tax advantages for real estate investors.  This is full-recourse lending, meaning that the applicant(s) will personally guarantee the new loan, however it will be recorded on title as the name of your entity. On some of our DSCR programs, we go a step further and do not report the new loan on the applicant's personal credit report.

Your loan originator will review the specific business entity documentation needed at the time of application.

IF YOU ARE PLANNING ON CLOSING IN THE NAME OF YOUR ENTITY, HERE ARE SOME THINGS TO KNOW:

 

  • All Applicants /Guarantors Must Be Entity Members.

  • Single Guarantor Option: A business entity with multiple members can have a single guarantor, provided they are a managing member or a majority owner.

  • Multiple Entity Members Option: If your business entity has multiple members, and you are planning to use only one person to guarantee the loan, be sure to discuss this with your loan originator upfront.

  • Multiple Business Entities: We allow transactions to close in the name of up to two business entities, as long as there is one guarantor who owns 100% of both entities.

💸 GET CASH OUT WITH A DSCR LOAN

DSCR Loans can be a great way to leverage a property for other investments and business endeavors.  You can use the cash to:

 

  • Invest in new properties or other investment opportunities

  • Improve your properties/ improving your cashflow potential

 

FOR CASH OUT, THE FOLLOWING CRITERIA APPLIES FOR SINGLE-UNIT PROPERTIES*:

 

  • Loan Amount Maximum: $4MM
  • Cash in Hand Maximum: $1
  • Minimum DSCR Ratio for Cash Out: 1.00 or higher
    • Maximum LTV:  75% (requires FICO 650 or higher - loan sizes up to $3.5M)
    • Maximum LTV:  70% (requires FICO 625 or higher - loan sizes up to $2M)
    • Maximum LTV:  65% (requires FICO 625 or higher)
    • Maximum LTV: 60% (requires FICO 600 or higher)
    • Maximum LTV: 50% (requires FICO 550 or higher)
  • Occupancy: For 1-4 unit residential properties, all units must be tenant-occupied. Vacant homes are not eligible.

* DSCR Cash-Out Transactions can have multiple overlapping criteria overlays (especially with credit scores lower than 660).

We strongly recommend CALLING US to discuss your scenario with an experienced DSCR Loan Originator.  

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THE "NO RATIO" DSCR LOAN

Our "No RATIO PRO" DSCR Program for investment properties where the existing rental income is not calculated towards the standard debt service requirements for a standard DSCR loan.

 

Our No RATIO PRO DSCR Program is especially helpful for seasoned investors looking to acquire properties quickly, and can help the investor acquire properties that may not cash-flow at the time of purchase.

 

Our No RATIO PRO DSCR Program allows the applicant to bypass the need for income or cash flow verification entirely.  Since there is no DSCR calculation, there is no risk to the applicant that the market rent from the appraisal report will fail to support the new payment.  It short, it removes the biggest risk in any DSCR loan.

 

Our No RATIO PRO DSCR Program can be helpful in the following scenarios:

 

  • Investors planning to list the property as a short-term rental (e.g., Airbnb or VRBO) but the property does not yet have a lease or historical income data for the property.
  • The property's projected rental income would cover the mortgage payments, but traditional lenders require established rental history or proof of cash flow.
  • Properties without historical rental income or a tenant lease in place, the investor cannot meet these criteria despite the property's potential

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👉 KEY PROGRAM HIGHLIGHTS FOR OUR No RATIO PRO DSCR PROGRAM:

 

  • Max LTV - 75% LTV

  • Terms:  30 Year Fixed-Rate Term

  • Applicant Middle FICO score - 650+

  • Maximum Loan Size: $2MM

  • Eligible properties - Single Unit residential homes, 2-4 Multi-family homes, 5-8+ Unit Properties, Condominiums, Townhomes/ Villas, Mixed-Use Properties.

  • Applicant Experience: First-time buyers are ineligible for investment 1-unit properties

 

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No RATIO PRO
DSCR with No Market Rent Restrictions – Invest Freely.

1 Unit | 2-4 Unit |  5-9+ Unit | Mixed-Use

⭐ TOP RISING NEW PROGRAM

🏘️🏠 MULTI-UNIT PROPERTIES

We lend on Multi-unit homes, including 2-4 Unit Multi-family homes (duplex, triplex, quadplex).

 

  • FOR 2-4 UNIT HOMES: Maximum LTV 75%, dependent on applicant FICO score.  Minimum DSCR Ratio is 1.00.

  • FOR 5-9+ UNIT PROPERTIES - Maximum 75% with FICO 650 or higher. These properties are qualified on a per-transaction basis. Contact us to discuss project details or check out our No RATIO PRO DSCR Program.  

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DEALING WITH SURPRISES IN THE LOAN PROCESS

During the DSCR loan process, there can sometimes be unexpected challenges that arise.  the majority of these challenges tend to involve the amount of rental income that comes back in the Market Rental Analysis Report.

Sometimes these values come in lower than investors project, resulting in a DSCR ratio being lower than the minimum needed to qualify for the new loan.  

If this happens, you may be able to switch to our No RATIO PRO Program, which does not use the DSCR ratio to qualify.  

Or, you can try these tips for raising your DSCR Ratio »

TIPS FOR RAISING YOUR DSCR RATIO

If your DSCR is too low to qualify for a DSCR Loan, here are a few tips for raising your DSCR Ratio. If this doesn't work, ask your loan originator about our No Ratio DSCR option.

  • Increase your down payment

  • Reduce the coverage of your insurance policy, which may reduce your premium.

  • Buy additional discount points to decrease the interest rate on your loan.

  • Ask the seller for a closing cost credit.  Our DSCR programs allow up to 4% seller credits

  • Renegotiate the contract price of the home to meet the debt service requirements.

HAVE A QUESTION?

GET PRE-APPROVED FOR THIS PROGRAM TODAY »

CALL TODAY:
(813) 928-9610

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HAVE A QUESTION? MESSAGE US TODAY  »

This is not a commitment to lend.  Not all borrowers will qualify for the loan programs listed.  All program terms and conditions are subject to change and may be discontinued without prior notice. Contact loan originator for program questions and scenarios.