DSCR loans for rental property
The house is rented and the bank still wants two years of tax returns. A DSCR loan asks one question: does the rent cover the payment? If it does by 1.05 times, the property qualifies.
- 80%
- loan to value
- 30 yr
- fixed or ARM
- 0
- tax returns
DSCR · qualified on rentTypical rental
DSCR rental loan terms
Term sheetGuidelines as of November 2026
- Loan size
- $75,000 to $2,000,000
- Purchase or rate-and-term refinance
- Up to 80% of value
- Cash-out refinance
- Up to 75% of value
- Minimum DSCR
- 1.05: monthly rent divided by the monthly payment
- Term
- 30 years. Fixed, 5/6, 7/6 or 10/6 ARM, interest-only options
- Income documents
- None. No tax returns, W-2s or pay stubs
- Prepayment
- Your choice of 5, 4, 3 or 1 year, or none, where state law allows
- Credit score
- From 660. 700+ for the full 80%
Program maximums for non-owner-occupied 1–4 unit rentals held in an LLC or corporation. Not a commitment to lend.
What DSCR means
DSCR is the debt-service coverage ratio: the monthly rent divided by the monthly payment of principal, interest, taxes, insurance and HOA dues (PITIA). At 1.05 or higher the property qualifies. Your personal income never enters the calculation.
The rent used is the lower of the lease and the appraiser’s market rent. On a vacant purchase the appraiser’s market rent is used.
How to calculate DSCR
One rental, one month:
| Rent, the lower of lease and market rent | $2,900 |
|---|---|
| Principal and interest | $1,950 |
| Property taxes | $380 |
| Insurance | $120 |
| HOA dues | $50 |
| Monthly payment (PITIA) | $2,500 |
| DSCR: $2,900 ÷ $2,500 | 1.16, above the 1.05 minimum |
Illustration only.
Maximum loan to value by credit score
Leverage follows credit, not experience. A first rental qualifies.
Swipe sideways to see every column
| Credit score | Purchase | Rate-and-term refinance | Cash-out refinance |
|---|---|---|---|
| 700 and above | 80% | 80% | 75% |
| 680–699 | 75% | 75% | 70% |
| 660–679 | 65% | 65% | 60% |
| Foreign nationals | 65% | 65% | 60% |
DSCR loan requirements
- DSCR of 1.05 or higher
- Credit of 660 or higher, 700+ for the full 80%
- An LLC or corporation as the borrower. Every owner with 20% or more signs a guarantee
- A 1–4 unit rental in good condition, leased for 12 months or longer. Vacant purchases use market rent
- Two consecutive statements showing closing costs plus 3 months of payments, or 6 months on a refinance
- Company documents: articles, EIN letter, operating agreement, certificate of good standing
DSCR loan pros and cons
For: no tax returns, W-2s or pay stubs. The loan closes in your LLC. A first rental qualifies. Thirty-year terms with fixed, ARM and interest-only options. You choose the prepayment option, including none.
Against: the property has to carry its own payment. Rates run higher than on a conventional loan for a home you live in. Leverage stops at 80%. You need cash reserves at closing.
DSCR loans for foreign nationals
No US income, tax returns or residency are needed, because the loan qualifies on the rent. Foreign nationals borrow up to 65% of value on a purchase or rate-and-term refinance and 60% on a cash-out, with 12 months of payments held in reserve in a bank or brokerage account.
You buy through a US LLC or corporation, which can be formed before closing. Bring a valid passport and statements showing the down payment and the reserves.
DSCR loan questions
Do I need tax returns for a DSCR loan?
No. The loan qualifies on the rent the property brings in.
What DSCR do I need?
1.05 or higher, which means rent at least 5% above the monthly payment.
Can I buy a vacant rental?
Yes. The appraiser’s market rent is used to qualify.
How soon can I take cash out?
After 90 days of ownership. Between day 91 and day 180 the new value counts when you can show the completed renovation.
Is a DSCR loan a hard money loan?
No. It is a long-term, 30-year loan. Many investors buy and renovate with a short-term fix and flip loan, then refinance into a DSCR loan once the property is rented.
DSCR loan or conventional loan?
A conventional loan qualifies on your personal income and tax returns. A DSCR loan qualifies on the rent and closes in your LLC, which suits self-employed investors and anyone with several properties.
Do short-term rentals qualify?
Not in this program. It is for rentals on leases of 12 months or longer.
I own several rentals. Can one loan cover them?
Yes. A portfolio loan puts 2 to 10 rentals under a single 30-year loan, up to $2M, with the same 1.05 test. Mention it in the form.
Is there a prepayment penalty?
You choose: five, four, three or one year, or none, where state law allows.
Does the loan have to be in an LLC?
Yes, an LLC or a corporation borrows. If you don’t have one yet, you can set it up before closing.
Which states do you lend in?
In 47 states and Washington, DC: everywhere except North Dakota, South Dakota and Vermont. California, Florida and Texas are our main markets. Some programs have their own rules in certain states and counties, and we confirm them when we look at the deal.
Have a deal in hand?
Leave your contact details and a line about the deal. We get back to you with which loan fits, how much it covers and written terms, before you pay for an appraisal.
- No hard credit pull to see terms
- No tax returns or W-2s
- Business-purpose loans on investment property