DSCR FAQs

A DSCR (Debt Service Coverage Ratio) loan is a type of real estate investment loan that qualifies borrowers based on the property's income — not personal income. Lenders look at the ratio between the property's monthly rent and the loan's monthly payment (PITI) to determine approval.

DSCR stands for Debt Service Coverage Ratio, and it’s calculated using this formula:

DSCR = Gross Monthly Rent ÷ Monthly Debt Payment

• Gross Monthly Rent = actual or market rent from the property

• Monthly Debt Payment = principal, interest, taxes, and insurance (PITI), and sometimes HOA fees

Example:
If the rent is $2,000/month and the total loan payment is $1,600/month:

DSCR = 2,000 ÷ 1,600 = 1.25

A DSCR above 1.0 means the property is cash-flowing. The higher the number, the stronger the deal looks to lenders.

Most lenders want to see a DSCR of 1.0 or higher, meaning the property's income covers or exceeds the debt payment. Some lenders (like us) can offer options below 1.0 in certain situations.

Yes. DSCR loans are ideal for self-employed or first-time investors because approval is based on the property, not your job or personal tax returns.

DSCR loans can be used for single-family rentals, small multifamily (2–4 units), large multifamily, short-term rentals (Airbnb/VRBO), and even commercial properties like storage or mobile home parks (with a few different qualifiers).

Down payments typically range from 20%–25%, depending on the loan size, property type, and DSCR ratio. We also have options with lower down payments if the deal is strong.

The beauty of DSCR loans is the minimal documentation required. Here's what we typically need:

• A rent roll or lease agreement (or projected market rent if it's vacant)

• A purchase contract (for purchases)

• Your LLC or entity docs (Articles of Incorporation, Operating Agreement, EIN)

• Last 2 months of bank statements showing proof of funds for down payment, closing costs, and reserves

• Front & Back images of your driver’s license

• A completed loan application (we’ll send you a simple intake form)

We don’t require tax returns, W2s, or personal income verification — the deal is approved based on the asset itself.

We can close in as little as 10–15 days, depending on how fast we receive your documents & when the appraisal comes back. Our process is streamlined and relationship-driven — the faster you move, the faster we fund.