A DSCR loan has fewer requirements than a conventional investment property loan because it never looks at your personal income. What it does look at is the property, your credit, your cash and the entity you buy in. Here is every requirement on our program and why it matters.
1. The ratio
DSCR is the monthly rent divided by the full monthly payment, principal, interest, taxes, insurance and HOA. At 1.00 the rent covers the payment exactly. Most programs want at least 1.00, and pricing improves as the ratio climbs toward 1.25 and above. Check yours with the DSCR calculator, and see what changes between 1.25 and 1.0.
2. Credit score
620 minimum. Credit still matters on a DSCR loan, it is just not the whole story. A stronger score lowers the rate and can offset a thinner ratio.
3. Down payment
We lend up to 80% of value, so expect at least 20% down plus closing costs. On a cash out refinance the same 80% ceiling applies to the new loan. See how much a DSCR cash out refinance can pull.
4. The property
- Single family homes, condos and 2 to 4 unit properties
- Long term leases, or vacant with an appraiser's market rent
- Rent ready condition. A property that needs real rehab should start on a rehab loan and refinance into DSCR once it is leased. More on that in DSCR loans on properties that need work.
- Not eligible: short term rentals under 30 days, owner occupied homes, 5+ units, mixed use and commercial
5. An LLC
Every DSCR loan on our program closes in an LLC. That keeps the rental and its liability out of your personal name. Here is why DSCR lenders require an LLC and how to set yours up.
6. Reserves
Lenders want to see cash left after closing to cover several months of the payment, so a vacancy or a repair does not put the loan behind. Keep bank statements handy.
7. Documents
- Photo ID
- LLC formation documents and operating agreement
- The lease, or the appraiser's rent schedule on a vacant property
- Recent bank statements for down payment and reserves
- Insurance quote for the property
That is the whole list. No tax returns, no W-2s, no pay stubs.
Our DSCR program at a glance
- Up to 80% of the property's value
- Qualifies on the rent, with no tax returns, W-2s or pay stubs
- 620 minimum credit score
- Single family and 2 to 4 unit rentals on long term leases
- Closes in an LLC
- 30 year fixed options and step down prepayment choices
- Closings in about 21 to 30 days once conditions are met
Compare markets on the DSCR loans by state page, or send us your deal for terms.
Frequently asked questions
What credit score do I need for a DSCR loan?
Our DSCR program needs a 620 minimum credit score. A higher score and a higher ratio both improve pricing.
How much do I need to put down?
We lend up to 80% of the property's value, so plan on at least 20% down plus closing costs. A ratio under 1.00 or a lower credit score usually means more down.
Do I need tax returns or proof of income?
No. A DSCR loan qualifies on the property's rent, not your personal income. There are no tax returns, W-2s or pay stubs.
Does the property have to be rented already?
It needs a long term lease in place or a market rent from the appraiser for a vacant property. Short term rentals under 30 days are not eligible on our program.
Can I close in my own name?
No. Our DSCR loans close in an LLC. If you do not have one yet, set it up before closing.