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DSCR (Debt Service Coverage Ratio) Loan
A DSCR Loan (Debt Service Coverage Ratio Loan) is a mortgage option for real estate investors that focuses on a property’s rental income rather than the borrower’s personal income. Instead of using traditional income documentation, lenders approve the loan based on whether the property’s cash flow covers the mortgage payments. This makes it an excellent choice for investors with multiple rental properties looking to expand their real estate portfolio without the need for tax returns or pay stubs. If you’re an investor seeking easy qualification based on rental income, a DSCR loan could be the ideal financing solution.
A Reliable Home Loan You Can Trust.
Approval Based on Property Income
Qualify for a loan based on the rental income generated by the property, not your personal income.
Simplified Loan Process
Skip traditional income documentation with streamlined underwriting focused on property performance.
Flexible for Investors
Perfect for expanding real estate portfolios with income-producing properties.
No Limits on Property Count
Invest in multiple properties without restrictions on the number of loans you can take.
Loan Guidelines
If your details are near these guidelines, we encourage you to apply or reach out. Even if you don’t qualify for a 30-year fixed-rate mortgage, we may have other options available.
The Home
Purchase a new home or refinance your current mortgage.
Credit Profile
A credit score above 620 is typically required.
Debt-to-Income
Your debt-to-income ratio (DTI) should be under 50%.
Closing Costs
Along with your down payment, you’ll need sufficient funds to cover closing costs.
Explore Your Potential
Our calculators help you understand and visualize your options
Mortgage Calculator
Planning to buy a home? Calculate your estimated monthly payments, including taxes and insurance.
Refinance Calculator
Considering refinancing your mortgage? Find out how much you could save.
Frequently Asked Questions
Have questions? We’ve got answers! Explore our FAQ section to find helpful information about loans, refinancing, and more. If you don’t see what you’re looking for, feel free to contact us—we’re here to help!
Who are DSCR loans best for?
DSCR loans are best for real estate investors who want to qualify for a loan based on the cash flow of the property rather than their personal income. These loans are ideal for borrowers with multiple properties or those who prefer a simplified underwriting process.
How do DSCR loan work?
DSCR loans use the debt service coverage ratio to determine eligibility. This ratio compares the property’s income (such as rental income) to its debt obligations. If the property generates sufficient income to cover its loan payments, you can qualify for financing, even without meeting traditional income documentation requirements.
What are pros and cons of a DSCR loan?
Pros:
- No personal income verification required; approval is based on property income.
- Simplified underwriting process.
- Ideal for real estate investors with multiple properties.
Cons:
- Higher interest rates compared to conventional loans.
- Larger down payment requirements (often 20% or more).
- Limited to income-producing properties.
Can I use a DSCR Loan for residential properties?
Yes, but only for residential properties that generate rental income. DSCR loans are tailored for income-producing properties, such as single-family rentals, multifamily units, or vacation rentals.