A DSCR (debt service coverage ratio) loan is an investment-property mortgage that qualifies on the rent the property earns instead of your personal income. The lender divides the monthly rent by the monthly payment, including taxes, insurance and HOA. No tax returns, W-2s or employment verification are required. DSCR loans are for 1-4 unit rentals, not the home you live in.
Key takeaways
- Qualifies on the property's rent, not your income
- No tax returns, W-2s or job verification
- Works for long-term and short-term rentals
- You can close in your name or an LLC
- Business-purpose loans for investment property only
How a DSCR loan works
A traditional mortgage starts with you: your pay stubs, your tax returns, your debt-to-income ratio. A DSCR loan starts with the property. The question the lender asks is simple: does the rent cover the payment?
To answer it, the lender divides the property's monthly rent by its monthly housing payment, called PITIA (principal, interest, taxes, insurance and association dues). A ratio of 1.00 means the rent exactly covers the payment. Above 1.00 means the property cash-flows. See our step-by-step guide on how to calculate DSCR.
Who DSCR loans are built for
- Self-employed investors whose tax returns show a lot of write-offs and not much taxable income
- Investors growing a portfolio who don't want every new property tied to their personal debt-to-income
- Short-term rental owners (Airbnb, VRBO) whose income doesn't fit a W-2 box
- Buyers closing in an LLC for liability or bookkeeping reasons
- First-time investors: previous landlord experience is not required on our program
What lenders look at instead of your income
- The ratio. Rent divided by PITIA. Higher ratios get better pricing.
- Your credit score. It still matters. Our program starts at a 620 score.
- Down payment or equity. Lower loan-to-value means better pricing and more flexibility on the ratio.
- Reserves. Cash or investments left over after closing, measured in months of payments.
- The property. An appraisal confirms value and, for long-term rentals, market rent.
DSCR loan vs. conventional investment loan
| DSCR loan | Conventional investment loan | |
|---|---|---|
| Qualifies on | Property rent | Your personal income and debt-to-income |
| Tax returns / W-2s | Not required | Required |
| Close in an LLC | Yes | Generally no |
| Short-term rental income | Accepted | Limited |
| Pricing | Typically somewhat higher | Typically lower if you qualify |
If you have strong W-2 income and only a property or two, a conventional loan may price better, and we will tell you that. If your income is hard to document or you are scaling, DSCR is usually the cleaner path.
Our DSCR program at a glance
- Loan amounts up to $3.5 million
- Up to 85% loan-to-value
- Credit scores from 620
- Ratios below 1.00, down to no-ratio options
- Purchase, rate/term refinance and cash-out refinance
- Single-family, 2-4 units, condos and townhomes
Program guidelines as of October 2026 and subject to change. Not all applicants will qualify. DSCR loans are business-purpose loans for non-owner-occupied investment property.
Common questions
Is a DSCR loan the same as a no-income-verification loan?
Close. DSCR loans do not verify personal income, but they do verify the property's rent, your credit, your assets and reserves.
Can I use a DSCR loan for my primary home?
No. DSCR loans are business-purpose loans for investment property only. If you will live in the home, we will look at conventional, FHA, VA, USDA or bank statement options.
Do I need landlord experience?
Not on our program. First-time investors are welcome.
Can I use Airbnb income?
Yes. Short-term rental income is accepted, and we can use the higher of market rent or the current lease.
Brad or Buddy will review your goals and send you a personal game plan within the hour. No credit pull.
Keep learning
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