DSCR Loans for Real Estate Investors
A DSCR (debt service coverage ratio) loan lets real estate investors qualify based on a rental property’s income instead of their personal income or tax returns.
If you own or are buying rental properties, a DSCR loan can help you grow without showing W-2s or tax returns. Business-purpose DSCR loans are available nationwide where permitted, including to LLCs. DSCR loans are one of several Non-QM loans we offer.
Who it’s for
How it works
Lenders compare the property’s rent to its monthly housing cost: principal, interest, taxes, insurance and any HOA dues. That comparison is the DSCR. For example, rent of $3,000 against a $2,500 monthly cost gives a DSCR of 1.20. Many programs look for a DSCR of at least 1.0, and some allow lower ratios with adjustments.
Rent is usually documented with a lease or an appraiser’s market rent estimate. Because these are business-purpose loans, they aren’t for homes you live in.
What you need to qualify
- A property that generates enough rent to meet the program’s DSCR
- Credit requirements that vary by program
- Down payment or equity requirements that vary by program and loan size
- Reserves, usually several months of payments
- Non-owner-occupied 1–4 unit properties, and some condos and small multifamily
Documents to have ready
- Lease agreement(s), or a market rent analysis from the appraisal
- Bank statements for down payment and reserves
- LLC documents, if closing in an entity
- Photo ID and credit authorization
How it works with Amerifi Lending
Frequently asked questions
Do I need to show personal income?
Generally, no. Qualification is based mainly on the property’s cash flow, plus your credit and reserves.
Can I close in my LLC?
Yes. Many DSCR programs allow vesting in an LLC with a personal guarantee.
Do DSCR loans have prepayment penalties?
Many do, because investors pay for that flexibility in other ways. Options with shorter or no prepayment penalty may be available at different pricing, and we’ll show you the trade-offs.
Can I use a DSCR loan in any state?
Business-purpose DSCR loans are available in most states. A few states have additional licensing rules, so tell us where the property is and we’ll confirm.
Helpful guides
Related loan options
Ready to see what you qualify for?
Tell us about the property and the rent. We’ll run the DSCR and give you a quick read on terms.
- No cost to find out what you qualify for
- Straight answers, no pressure
- We reply within one business day