Loan program · Investment
DSCR Loans
A DSCR loan qualifies an investment property on its own cash flow. The lender compares the property's gross rent to the full mortgage payment including taxes, insurance and HOA. That ratio is the debt service coverage ratio. Personal income and employment are generally not used to qualify.
Guidance by Manny
Who it is designed for
- Investors buying or refinancing single family and small multifamily rentals
- Investors who own several properties and are limited by debt to income guidelines
- Self employed investors whose tax returns complicate agency financing
- Investors closing in an LLC
Eligible occupancy types
- Investment property only
Down payment or equity
Down payment requirements are set by the investor and are typically meaningfully higher than owner occupied financing.
Major benefits
- No personal debt to income calculation on most programs
- Vesting in an LLC is commonly allowed
- Often no limit on the number of financed properties, subject to investor guidelines
- Purchase, rate and term, and cash out options
Important considerations
- Pricing is higher than owner occupied agency financing
- Prepayment penalties are common and vary by state and program
- The property must support the required coverage ratio
- Short term rental income treatment varies by investor
How qualification generally works
- Appraisal with a rent schedule, or an executed lease
- Credit score meeting the program tier
- Reserves after closing, generally measured in months of payment
- Property type and condition eligible under the program
Documents commonly requested
- Photo ID and entity documents if you are closing in an LLC
- Lease agreements or a rent schedule appraisal for subject and other rentals
- Two months of asset statements for down payment, closing costs and reserves
- Mortgage, insurance, tax and HOA information on the schedule of real estate owned
- Business or investing experience summary, if requested by the program
Not sure this is the right mortgage?
Tell Manny what you're trying to accomplish. He can help you compare this program with other financing options that may fit your situation — your income and how it is documented, your credit and assets, the property and how you will use it, your timeline, and the guidelines that apply. Most borrowers have more than one workable path.
Frequently Asked Questions
Related programs and next steps
Conventional Investment Property Loans
Agency financing for rentals, qualified on your personal income.
Learn more SpecialtyBank Statement Mortgages
Qualify with business or personal deposits instead of tax return net income.
Learn more InvestmentFix and Flip Loans
Short term financing for purchase plus renovation on a resale or refinance exit.
Learn more RefinanceInvestment Property Refinance
Restructure or pull equity from rental property you already own.
Learn moreConsidering dscr loans?
We will review your documents, compare the realistic options, and give you a written preapproval you can use with confidence. Nothing on this page is a commitment to lend.