How DSCR Loans Work
A DSCR loan evaluates the property, not the borrower's personal income. The Debt Service Coverage Ratio is calculated by dividing the property's gross rental income by the total mortgage payment (PITIA, principal, interest, taxes, insurance, and HOA). If the ratio is 1.0 or higher, the property's income covers the debt, and you qualify.
This means no W-2s, no tax returns, no employer verification. You can close in an LLC or entity name. It's the preferred financing tool for serious real estate investors who want to scale without the documentation headaches of conventional lending.
DSCR Loan Highlights
- No personal income verification
- No tax returns or W-2s needed
- Close in LLC or entity name
- Loan amounts up to $3M+
- Best rates at 1.1+ DSCR
- Interest-only options available
- 1-10 unit properties eligible
- Purchase and refinance
DSCR Loan FAQ
What DSCR ratio do I need to qualify?
Most lenders require a minimum DSCR of 0.75 to 1.0, but the best rates are available at 1.1 and above. Some programs allow ratios below 1.0 (where rent doesn't fully cover the payment) with additional reserves or a lower LTV. I'll run the numbers on your specific property to determine your options.
Can I use a DSCR loan for a short-term rental or Airbnb?
Yes, many DSCR programs accept short-term rental income. Some lenders use AirDNA projections, others require 12 months of booking history. I work with lenders who accept both approaches depending on your situation.
What's the minimum down payment?
Typically 20-25% down for purchase transactions. Some lenders go as low as 15% with a strong DSCR and credit profile. Cash-out refinances generally max out at 75% LTV.
How many DSCR loans can I have?
There's no standard limit like conventional loans. Most DSCR lenders allow multiple simultaneous loans, some cap at 10, others at 20+. Your total exposure, credit, and liquidity are the real factors.
Can I do a DSCR loan outside of California?
Yes. DSCR loans are business purpose loans, which means I can originate them in most states nationwide, not just the 9 states where I'm licensed for primary residence lending.
Apply online or call me to discuss your specific state and scenario.
