Qualify on the property's rental income — not your personal income, tax returns or debt-to-income ratio.
A DSCR loan asks one question: does this property produce enough rent to cover its own mortgage payment? Your W-2s, tax returns and personal debt-to-income ratio stay out of the file entirely.
That makes it the workhorse loan for real estate investors — particularly anyone whose returns show heavy depreciation, or who owns enough property that a conventional lender's debt-to-income math stops working.
Debt Service Coverage Ratio is the property's gross monthly rent divided by its full monthly payment — principal, interest, taxes, insurance and HOA dues, together known as PITIA.
What the number means. A 1.20 DSCR says the property generates 20% more income than it needs to cover its payment. 1.00 is exactly break-even. Below 1.00 the property does not cover itself on paper — still financeable on these programs down to 0.75, generally with a larger down payment or a rate adjustment.
Acquire single-family homes, 2-4 unit properties, condos and townhomes as investments.
Rate-and-term refinancing to lower a payment or move off a short-term or hard-money loan.
Cash-out refinancing to fund the next acquisition or improve an existing property.
The write-offs that legitimately reduce your taxable income are exactly what sink a conventional application. A DSCR file never looks at your return, so a strong portfolio on paper stays strong.
Title can be held in an LLC or other entity rather than your personal name, which is how most investors prefer to hold property. Conventional financing generally requires personal vesting.
Conventional guidelines cap most borrowers at ten financed properties. DSCR programs have no such limit, so the eleventh purchase underwrites the same as the first.
No tax returns, no W-2s, no employment verification, no personal debt-to-income calculation. The file centres on the property, the lease or market rent, and your credit.
Program parameters shown are current as of publication and are subject to change. All financing is subject to credit approval, property review and program availability.
No obligation — find the right fit for your situation.