A DSCR loan is an investment property mortgage that qualifies real estate investors based on the property’s rental income — not the borrower’s personal income, tax returns, or debt-to-income ratio. DSCR stands for Debt Service Coverage Ratio: gross rental income divided by the mortgage payment. Loans up to $2,500,000. LLC vesting allowed. Short-term rental income (Airbnb, VRBO) accepted on Plus programs. Lending in 49 states. Not available in New York.
The property’s rent qualifies the loan.
No tax returns. No W-2s. No DTI ratio. Just rental income vs. the mortgage payment. Build your portfolio without using your personal income or hitting Fannie/Freddie property limits. 25+ years closing investor loans.
What Is A DSCR Loan?
A DSCR loan is an investment property mortgage that qualifies the borrower using the property’s rental income rather than the borrower’s personal income or tax returns. The lender divides the property’s gross rental income by the full mortgage payment to calculate the Debt Service Coverage Ratio.
A DSCR of 1.00 means rent exactly covers the mortgage payment. Above 1.00 means the property cash-flows. Below 1.00 means the rent is less than the payment. PRMG offers DSCR programs from Core (1.00 and above) all the way to No Ratio (below 0.75) on the Plus tier. Information current as of May 2026.
Why is a DSCR loan different from a regular investment property mortgage?
A regular investment property loan uses your personal income, tax returns, and DTI ratio to qualify. Each rental property you add to your portfolio increases your debt and pushes your DTI up. Most conventional lenders cap you at 10 financed properties. A DSCR loan ignores your personal income — only the property’s rent and the mortgage payment matter. There’s no limit on how many DSCR loans you can have.
Who uses DSCR loans?
DSCR loans are built specifically for real estate investors. Common borrowers include:
- First-time investors — buying their first rental without using personal tax returns
- Experienced landlords — past the 10-property conventional cap, scaling up
- BRRRR investors — buying, rehabbing, renting, refinancing into long-term DSCR debt
- Short-term rental operators — Airbnb and VRBO hosts qualifying on AirDNA projections (Plus only)
- Self-employed investors — heavy write-offs make their tax returns look small but the property cash-flows
- LLC investors — title vested in an LLC, partnership, or corporation for asset protection
- Foreign nationals — buying U.S. rental property without a U.S. tax return
Why Investors Use DSCR Loans
No personal income verification
No tax returns. No W-2s. No 1099s. No pay stubs. The application doesn’t even list your income or employment. Only the property’s rent and the mortgage payment matter.
No DTI ratio
Your other debts don’t kill the deal. Your other rentals don’t kill the deal. Even if you have 30 financed properties already, a DSCR loan only looks at the subject property’s cash flow.
No financed-property limit
Conventional financing caps you at 10 financed properties total. DSCR has no cap. Build a 50-property portfolio if the deals make sense.
LLC, partnership, or corporation vesting
Title can be held in your LLC, partnership, or corporation. Personal guarantor required. The loan is in your personal name — only the title vests in the entity. EIN required.
Short-term rental (Airbnb, VRBO) income counts
Plus programs accept short-term rental income, including AirDNA market projections for unleased Airbnb properties. Available even to first-time investors. Not eligible in any New York City borough.
Loans up to $2.5 million
Loan amounts from $75,000 (Core ratio ≥ 1.00) up to $2,500,000. Foreign nationals up to $1,500,000.
How A DSCR Loan Calculates The Ratio
Determine the gross rental income
For long-term rentals, the lender uses the lower of (a) the executed lease or (b) the market rent on the appraisal (FNMA Form 1007 or 1025). If the actual lease is higher than the market rent, the lender can use the lease amount with proof of 3 consecutive months of rent receipt at that level.
Calculate the full mortgage payment (PITIA)
PITIA = principal, interest, taxes, insurance, and HOA dues. Interest-only loans qualify on the ITIA payment (interest, taxes, insurance, HOA — without principal). ARM loans qualify at the start rate.
Divide rent by payment
DSCR = gross rent ÷ PITIA. A property renting for $2,500/month with a $2,000/month PITIA has a DSCR of 1.25. The property cash-flows. A property renting for $2,500 with a $2,800 PITIA has a DSCR of 0.89 — covered by the Core <1.00 program or Plus options.
Match the ratio to the program
DSCR ≥ 1.00: Core or Plus, best terms. DSCR < 1.00 and ≥ 0.75: Core or Plus, slightly higher rates and lower max LTV. DSCR < 0.75: No Ratio loan on Plus only — qualifies even when the property doesn't fully cover the payment.
DSCR Loan Requirements
DSCR Program Tiers
Core — DSCR 1.00 or higher
The standard DSCR loan. Property cash-flows at break-even or better. Best rates and highest LTVs. Up to 80% LTV on purchase with 700+ credit, $1.5M loan amount. Available as 15-, 30-, and 40-year fixed; interest-only; 5/6 and 7/6 ARM options. Loans start at $75,000.
Core — DSCR below 1.00 but at least 0.75
For properties where rent doesn’t fully cover the payment. Slightly tighter LTVs (typically 70%) and the loan amount minimum jumps to $250,000. Useful when you’re buying a property at the low end of cash flow but still meets the 0.75 floor.
Plus — DSCR 1.00 or higher (expanded options)
Includes Plus expansions: short-term rental income (Airbnb, VRBO), AirDNA projections for qualifying, log homes, condotels, 20-acre properties, and credit scores down to 620. Loans start at $100,000.
Plus — DSCR below 1.00 but at least 0.75
Cash-out refinance options become available on this tier (Core <1.00 doesn't allow cash-out). 700+ FICO with strong reserves and you can pull cash out of a property even when the DSCR is below 1.00.
Plus — No Ratio (DSCR below 0.75)
For properties where rent doesn’t even come close to covering the payment — luxury rentals, value-add deals, or markets with unusual rent-to-price ratios. Available only on Plus. Lower LTVs and higher rates, but the loan still closes when the property’s rent is far below break-even.
DSCR Loan Vs. Conventional Investment Property Loan
DSCR Loan Myths
Myth: DSCR loans don’t check anything — no credit, no income, no docs.
Truth: DSCR loans check credit, assets, the property’s rental income, and the appraisal. They don’t check personal income, employment, or DTI. The “no doc” reputation comes from the missing income documentation — not from the absence of underwriting.
Myth: I need a DSCR over 1.25 to qualify.
Truth: Standard DSCR loans qualify at 1.00 or higher. Programs go down to 0.75 with reduced LTV, and No Ratio loans (DSCR below 0.75) are available on the Plus tier.
Myth: DSCR loans don’t allow Airbnb or short-term rentals.
Truth: Plus programs accept short-term rental income — including AirDNA market projections for first-time investors and unleased properties. Available across most of the country, except in New York City boroughs where local short-term rental rules block the income.
Myth: I need to be an experienced investor to qualify.
Truth: First-time investors qualify on DSCR. The minimum DSCR is 1.00 and minimum credit score is 700 for first-time investors, but it’s a real path. You don’t need a track record of rental ownership.
Myth: DSCR loans are only for big investors with deep pockets.
Truth: Loans start at $75,000 on Core. The product fits investors at all scales — single-rental owners, BRRRR investors, multifamily portfolios.
DSCR Loan FAQ
What is a DSCR loan?
A DSCR loan is an investment property mortgage that qualifies based on the property’s rental income rather than the borrower’s personal income. DSCR stands for Debt Service Coverage Ratio: gross rental income divided by the full mortgage payment (PITIA). It’s a Non-QM product designed specifically for real estate investors.
How does a DSCR loan work?
The lender calculates the DSCR ratio by dividing the property’s gross rental income by the full mortgage payment (principal, interest, taxes, insurance, HOA dues). If the ratio meets the program minimum — typically 1.00 — the loan qualifies based on the property alone. Personal income, tax returns, and DTI ratio aren’t part of the underwriting.
How is DSCR calculated?
DSCR = gross monthly rent ÷ monthly PITIA. PITIA stands for principal, interest, taxes, insurance, and HOA dues. A property renting for $3,000/month with a $2,400/month PITIA has a DSCR of 1.25 ($3,000 ÷ $2,400). Interest-only loans qualify on ITIA (without principal). ARM loans use the start rate.
What is a good DSCR for an investment property loan?
1.00 or higher is “good” — the property cash-flows. 1.20 or higher is strong and gets you the best rates and highest LTVs. Below 1.00 is still loanable on programs that allow lower ratios, with reduced LTV. Below 0.75 requires a No Ratio loan on the Plus tier.
What are the DSCR loan requirements?
Investment property only (no primary residence, no second home), 1-4 unit eligible, minimum DSCR ratio depending on program (1.00 standard), minimum 660 credit score (620 on Plus expansions, 700 for first-time investors), 20%-35% down depending on ratio and credit, 6 months PITIA reserves, executed lease agreement or rental appraisal addendum, and a notarized Business Purpose certification.
What documents do I need for a DSCR loan?
Government photo ID, 2 months of bank statements showing your down payment and reserves, executed lease agreement (or rental appraisal addendum if vacant), credit check, appraisal, hazard insurance binder, and a notarized Certification of Business Purpose. If vesting in an LLC: operating agreement, EIN letter, and a personal guaranty form. No tax returns. No W-2s. No 1099s. No pay stubs.
Can a first-time investor get a DSCR loan?
Yes. First-time investors qualify on DSCR with minimum 700 credit score and DSCR ratio of 1.00 or higher. You don’t need a track record of rental ownership. Many investors buy their first rental on a DSCR loan without ever owning investment property before.
Can I use a DSCR loan for an Airbnb or short-term rental?
Yes, on Plus programs. Short-term rental income is accepted, including AirDNA market projections for unleased properties. First-time short-term rental investors qualify on Plus. Local rules apply — short-term rental income is not eligible in any New York City borough.
Can I close a DSCR loan in an LLC?
Yes. Title can be held in an LLC, partnership, or corporation. The loan itself is in your personal name as the personal guarantor — the entity holds title to the property. EIN required for the entity. Layering of entities (an LLC owned by a trust, etc.) is allowed on Plus programs.
What credit score do I need for a DSCR loan?
660 is the standard floor on Core. Plus expansions go down to 620. First-time investors need 700+. Foreign nationals using foreign credit price at 660. Better credit gets you better rates and higher LTVs.
What’s the down payment for a DSCR loan?
20% minimum on the strongest deals (Core ratio ≥ 1.00, 700+ FICO, $1.5M loan). 25% to 35% on lower ratios, lower credit, larger loans, or Plus No Ratio tier. Foreign nationals: 30% minimum (max 70% LTV on purchase).
How are DSCR loan rates compared to conventional rates?
Rates are competitive. Your exact rate depends on your credit, the DSCR ratio, the LTV, and the program. Strong DSCR (over 1.25) with high credit and lower LTV gets the best pricing. The whole point is that the loan closes when conventional financing won’t — most investors run the math and the rate is worth it for the deal.
Can I cash-out refinance with a DSCR loan?
Yes, on properties with DSCR ratio ≥ 1.00 (Core or Plus) or DSCR < 1.00 with Plus only. Cash-out is available on the No Ratio program too. Common uses: pull cash out for the next purchase, recapitalize after a BRRRR rehab, pay off short-term debt with long-term DSCR debt.
DSCR loan vs. hard money — which is better?
DSCR loans are 30-year fixed-rate first mortgages designed for long-term hold. Hard money is short-term, higher-rate financing for fix-and-flip or quick acquisition. Most investors use hard money to acquire and rehab, then refinance into a DSCR loan as long-term debt. They serve different stages of the deal.
DSCR loan vs. HELOC for buying a rental?
A HELOC pulls equity out of your existing home (primary or rental) — usually variable rate, second-position debt, with a draw period. A DSCR loan is a 30-year first mortgage on the new investment property. Many investors use a HELOC for the down payment and the DSCR loan for the rest of the purchase. Both can play a role.
Can I get a DSCR loan in Florida, Texas, or Ohio?
Yes. Lending in 49 states. Florida, Texas, Ohio, Michigan, North Carolina, Georgia, Arizona, and most other states are eligible. Not available in New York. Local rules on short-term rentals may affect Airbnb-qualified loans (notably NYC, where short-term rental income isn’t eligible at all).
What’s a “No Ratio” DSCR loan?
A No Ratio DSCR loan qualifies a property even when the DSCR is below 0.75 — meaning the rent doesn’t come close to covering the payment. Available only on Plus programs. Lower LTVs (60-75% depending on credit and loan amount) and tighter credit requirements (660-740 FICO depending on tier). Useful on luxury rentals or markets with unusual rent-to-price economics.
Can foreign nationals get a DSCR loan?
Yes. Foreign nationals — non-U.S. citizens authorized to be in the U.S. on a temporary basis — qualify for DSCR loans up to $1,500,000. Maximum 70% LTV on purchase or rate-and-term, 60% on cash-out. Minimum DSCR 1.00. Six months reserves required (foreign account assets eligible). Foreign credit prices at 660.
Are there pros and cons to DSCR loans?
Pros: no personal income or tax returns, no DTI, no financed property limit, LLC vesting allowed, short-term rental income accepted on Plus. Cons: investment property only (no primary or second home), 20%+ down payment, slightly higher rates than conventional, manual underwriting takes longer than automated. Most investors run the math and the trade-offs are worth it for portfolio scaling.
Related Loan Options
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Creator-specific deep dive — for content creators and influencers building a rental portfolio with creator cash without using personal income.
Bank Statement Loans
If you’re buying a primary or second home as a self-employed borrower with bank deposit income, bank statement loans are the path. DSCR is investor-only.
1099 Mortgage Loans
For self-employed borrowers buying their primary home using 1099 income. If you also want to add a rental, DSCR is the second piece.
All Non-QM Loan Options
Compare every alternative-doc loan path — DSCR, bank statement, 1099, P&L, asset depletion, ITIN, foreign national.
About The Author
J.D. Peck — Area Manager and Mortgage Loan Originator at Paramount Residential Mortgage Group, Inc. NMLS 314883. 25+ years in mortgage. 3,100+ loans closed. Scotsman Guide Top Originator 2026. Specializes in Non-QM, DSCR, and complex investor financing.
Last updated: May 2026.
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