DSCR Loans

Best uses

• Buying long-term rentals
• Refinancing out of hard money after a rehab
• Cash-out refinancing to fund the next purchase
• Financing short-term rentals in eligible markets

Typical borrower profile

• Rental investors from first property to large portfolios
• Self-employed investors with complex tax returns
• Investors using the BRRRR strategy

Potential qualification factors

Every lender sets its own criteria, and no factor guarantees or blocks approval on its own. Commonly reviewed items include:

• Property DSCR, commonly 1.0 to 1.25 or higher for the best terms
• Loan-to-value ratio
• Investor credit score
• Reserves after closing
• Property condition and market rents

Documentation to have ready

• Government-issued ID
• Entity documents (LLC or corporation)
• Purchase contract or payoff statement
• Property details and photos
• Insurance quote or declarations page
• Lease agreements or market rent analysis
• Bank statements showing reserves

Benefits

• No personal income documentation in most programs
• Scales with your portfolio instead of your W-2
• Available for purchases and cash-out refinances
• 30-year fixed and other structures exist

Common challenges to plan for

• Rates run above conventional owner-occupied mortgages
• Low-DSCR properties see tighter terms or declines
• Prepayment penalties are common; review them closely

Frequently asked questions