DSCR Rental Property Loans

We offer DSCR loans for real estate investors purchasing or refinancing income-producing residential properties. Instead of qualifying through personal employment and income, the program focuses primarily on the rental income generated by the property. With financing available up to 85% LTV and loan amounts up to $5 million, DSCR loans provide a flexible option for both new and experienced real estate investors.

DSCR Loan Program Highlights

• Available for investment properties only
• Loan amounts up to $5 million
• Financing available up to 85% LTV
• DSCR permitted as low as 0.75
• No personal income required for qualification
• No employment information required on the loan application
• One- to four-family properties eligible
• Condominiums eligible
• Up to 100% of market rent may be used
• Cash-out refinance options available
• Title permitted in an individual name or LLC
• No pricing adjustment for qualifying LLC vesting
• First-time homebuyers permitted
• First-time real estate investors permitted
• Gift funds allowed

What Is a DSCR Loan?

DSCR stands for Debt Service Coverage Ratio. It measures the property’s qualifying rental income against its monthly housing expense.

A simplified calculation looks like this: Monthly qualifying rent ÷ Monthly property expense = DSCR

For example, if a property generates $5,000 in qualifying monthly rent and has a total monthly housing expense of $4,000, the DSCR would be 1.25. A DSCR of 1.00 generally means the property produces enough qualifying rent to cover its housing expense. This program may consider properties with a DSCR as low as 0.75, allowing investors to finance properties whose current rent does not completely cover the proposed monthly expense.

No Personal Income or Employment Required

Traditional mortgage programs typically require tax returns, W-2 forms, pay stubs, and a review of the borrower’s employment history. That approach can create problems for self-employed investors or borrowers with substantial business deductions. The borrower must still satisfy applicable credit, asset, reserve, and property requirements.

• Personal income is not used for qualification
• Employment is not required for qualification
• No traditional debt-to-income ratio is calculated
• Personal tax returns are generally not required
• The property’s rental income drives the decision

Use 100% of the Market Rent

Qualifying income may be based on the property’s current lease or supported market rent. Up to 100% of the eligible market rent may be used in calculating the property’s DSCR. This can be particularly helpful when purchasing a vacant property or when the existing lease does not accurately represent current market conditions. The appraiser’s supported market-rent analysis may help establish the income used for qualification.

Eligible Investment Properties

• Single-family rental properties
• Two-family investment properties
• Three-family investment properties
• Four-family investment properties
• Investment condominiums

First-Time Investors Are Welcome

A borrower does not necessarily need previous landlord or investment-property experience. First-time homebuyers and first-time real estate investors may qualify when they satisfy the program’s remaining requirements. This makes the program available to borrowers purchasing their first rental property as well as experienced investors expanding an existing portfolio.

Personal or LLC Vesting

The property may be titled in the borrower’s individual name or a qualifying limited liability company. LLC vesting is available without an additional program adjustment when the entity satisfies the lender’s documentation and ownership requirements.

Cash-Out Options for Real Estate Investors

• Purchasing additional properties
• Renovating existing rentals
• Paying off other financing
• Increasing available reserves
• Business and investment purposes
• Other qualifying uses

Contact us to discuss your DSCR rental property loan.