Is a DSCR loan right for you?
A DSCR (Debt Service Coverage Ratio) loan may be a great fit if you’re purchasing or refinancing an investment property and want your approval to be based on the property’s cash flow rather than your personal income. These loans are designed for real estate investors who prefer a streamlined process and don’t want to provide tax returns, W-2s, or traditional income documentation.
DSCR loans are especially well-suited for investors with multiple properties, self-employed borrowers whose income is difficult to document, or buyers focused on acquiring income-producing real estate efficiently.
Benefits of a DSCR loan
-
Cash-Flow Based Qualification
Approval is primarily based on the property’s rental income versus its monthly expenses—not your personal income. -
No Tax Returns or W-2s Required
Ideal for self-employed investors or those with complex financial profiles. -
Faster, Simpler Process
Fewer documents often mean a smoother and more efficient closing. -
Scales Well for Portfolio Investors
DSCR loans are commonly used for multiple properties without the limitations of conventional financing. -
Flexible Property Types
Available for single-family rentals, short-term rentals, and small multi-unit investment properties.
DSCR loan eligibility requirements
-
Investment Property Only
Primary residences are not eligible. -
Debt Service Coverage Ratio (DSCR)
The property’s rental income must meet or exceed the monthly mortgage payment (often a DSCR of 1.0 or higher). -
Minimum Credit Score
Typically starts around 620–660, depending on the program. -
Down Payment or Equity Requirement
Commonly 20–25% down for purchases, with similar equity requirements for refinances. -
Property Appraisal with Rental Analysis
Rental income is determined by market rent or current lease agreements.
Check out what your investor ratio is by using our DSCR Investor Mortgage Calculator…
Our mortgage calculators are for demonstration purposes only and may not reflect actual numbers for your specific mortgage. Contact us and we will walk you through the best possible mortgage scenario for your specific needs!
The DSCR for this loan is
Monthly Payments
Principal & Interest (P&I)
$
Taxes & HOA
$
Homeowners Insurance
$
Debt Service Coverage Ratio
(Rental Income / Mortgage Payment)
Rental Income
$3,000
Monthly Mortgage
$3,000
DSCR
0.90
Estimated Taxes & Insurance
Property taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.
Estimated Payment
$ /mo
Loan amount
$
Down payment
$
Interest rate
Loan term
Property tax
Homeowner's insurance
$
HOA dues
$
Payment Breakdown
Amortization
Principal vs. Interest
Amortization Schedule Breakdown
Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan.
Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.
- Principal payments: $$240,000 (the amount borrowed)
- Interest payments: $$297,554 (the cost of borrowing)
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