DSCR Loans
No Income Verification
Debt Service Coverage Ratio loans qualify you based on the property’s cash flow, not your personal income. Perfect for investors building rental portfolios.
What is a DSCR Loan?
A Debt Service Coverage Ratio (DSCR) loan is a non-QM (non-qualified mortgage) loan product that allows real estate investors to qualify for financing based on the property’s cash flow rather than their personal income.
The DSCR is calculated by dividing the property’s net operating income by its total debt service. A DSCR of 1.0 means the property generates exactly enough income to cover its debt payments, while a DSCR above 1.0 indicates positive cash flow.
Key Benefits
No Income Verification
No need to provide tax returns, W-2s, or pay stubs. Perfect for self-employed investors or those with complex income structures.
Scalable Portfolio Building
Acquire multiple properties without hitting traditional lending limits on personal income-based loans.
Property Cash Flow Focus
Qualification based on the property’s ability to generate income and cover debt service.
Typical Requirements
Basic Qualifications
- DSCR of 1.0 or higher (some lenders accept 0.75+)
- 15%+ down payment
- Credit score typically 640+
- Property must be investment/rental property
- Property appraisal required
Documentation Needed
- Lease agreement or rent roll
- Property insurance
- Property tax records
- Bank statements for reserves
- Limited personal financial info
How to Calculate DSCR
DSCR = Net Operating Income ÷ Total Debt Service
No need to provide tax returns, W-2s, or pay stubs. Perfect for self-employed investors or those with complex income structures.
Net Operating Income (NOI)
- Gross Rental Income
- Vacancy Allowance
- Property Taxes
- Insurance
- HOA Fees (if applicable)
- Property Management
- Maintenance Reserve
Total Debt Service
- Principal Payment
- Interest Payment
Example: If a property has $30,000 NOI and $24,000 annual debt service, the DSCR would be 1.25 ($30,000 ÷ $24,000 = 1.25)