Jaime@mrmortgage.loans
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Loan program
DSCR investor loans.
Qualify on what the property rents for, not on your tax returns. Built for investors buying or refinancing rentals, one property or a growing portfolio.
1.0
typical ratio target
20%+
down, typically
1-4
unit rentals
LLC
closings often allowed
What a DSCR loan is
DSCR stands for debt service coverage ratio. Instead of your pay stubs or tax returns, the loan looks at whether the property’s rent covers its own payment. It is a non-QM loan made for investment properties, and one of the programs I use most with investors.
Because your personal income is not the focus, it works well for investors with write-offs, several properties already, or income that is hard to document the traditional way.
How the ratio works
Divide the monthly rent by the monthly payment, including principal, interest, property tax, insurance and any HOA dues.
| Example | Monthly amount |
|---|---|
| Rent | $3,000, from the lease or the appraiser’s market rent |
| Full payment | $2,800, including tax, insurance and HOA |
| Ratio | $3,000 ÷ $2,800 = about 1.07 |
A ratio of 1.0 means the rent covers the payment exactly. Many programs look for 1.0 or higher, and a stronger ratio usually means better terms. Some allow a lower ratio with more down.
Who it fits
- Investors whose tax returns show less income because of write-offs and depreciation.
- Investors growing past the number of financed properties a conventional loan allows.
- Self-employed buyers adding a rental without documenting business income.
- Investors who want to hold the property in an LLC.
The basic requirements
| Requirement | What to expect |
|---|---|
| Property use | Investment properties only. Not for a home you will live in. |
| Down payment | Often 20% to 25%, more with a lower ratio or credit score. |
| Credit score | Many programs start somewhere around 620 to 680, with better terms as your score climbs. |
| Rent | From an existing lease or the appraiser’s market rent estimate. |
| Reserves | Several months of the property’s payment left in savings after closing. |
| Prepayment | Many loans carry a prepayment penalty for the first few years, with options to shorten or remove it. |
These are typical guidelines. DSCR loans are not government loans, so each lender sets its own rules.
DSCR or conventional?
A conventional investment loan can price lower, but it needs your full personal income picture. DSCR trades a little pricing for a much simpler file.
| DSCR | Conventional investment | |
|---|---|---|
| How you qualify | The property’s rent | Your personal income and debts |
| Tax returns | Usually not needed | Required |
| Number of properties | No conventional cap on financed properties | Limited number of financed properties |
| Close in an LLC | Often allowed | Personal name |
| Pricing | Usually higher | Usually lower, when you qualify |
Buying a home to live in instead? See the conventional or bank statement program pages.
Common questions
DSCR loans, answered.
Some programs allow a ratio below 1.0, usually with a larger down payment or different pricing. Otherwise, more down or a different property can bring the numbers in line.
Some programs can, using the property’s rental history or a market estimate. Rules vary a lot by lender, so bring your numbers and I will check.
Often, for the first few years. There are usually options to shorten or remove it for different pricing, so decide up front how long you plan to keep the loan.
Often, yes. Many DSCR programs allow the loan in an LLC, usually with a personal guarantee from you.
No. DSCR loans are for investment properties only. For a home you will live in, look at conventional, FHA or a bank statement loan.
Next step
Run the numbers on your next rental.
Send me the property, the price and the rent. I will tell you where the ratio lands and which programs fit. Nothing here affects your credit.