DSCR Mortgages

DSCR Loans: The Perfect Mortgage Solution for Real Estate Investors

A Debt-Service Coverage Ratio (DSCR) Loan is a unique mortgage product designed specifically for real estate investors. Unlike traditional home loans, DSCR loans allow borrowers to qualify based on the rental income generated by the investment property rather than their personal income.

Whether you’re a seasoned investor or just starting to build your real estate portfolio, a DSCR loan provides flexibility, faster approval, and fewer income verification hurdles.

What is a DSCR Loan?

A DSCR loan is a no-income-verification mortgage that allows real estate investors to qualify based on a property’s ability to generate rental income. Lenders use the Debt-Service Coverage Ratio (DSCR) to determine if the property’s cash flow can cover the loan payments.

👉 Formula for DSCR:

DSCR = Gross Rental Income ÷ Total Monthly Mortgage Payment

✔️ If DSCR = 1.0 or higher → Property cash flow covers loan payments

✔️ If DSCR < 1.0 → Additional financial reserves may be required

Key Benefits of DSCR Loans:

✅ No Personal Income Verification – Qualify using rental income, NOT tax returns or pay stubs.

✅ Easier Approval Process – Less paperwork compared to traditional mortgages.

✅ Available for Multiple Properties – Finance single-family, multi-family, and mixed-use properties.

✅ Competitive Interest Rates – Lower than most hard money loans.

✅ Flexible DSCR Requirements – Some lenders approve loans even if DSCR is below 1.0.

✅ Unlimited Cash-Out Refinancing – Access your equity to grow your portfolio.

How DSCR Loans Work:

1️⃣ Property-Based Qualification – Lenders evaluate the property’s income potential instead of the borrower’s personal finances.

2️⃣ DSCR Calculation – Rental income should ideally be equal to or greater than the monthly mortgage payment.

3️⃣ Loan Approval & Funding – Once the DSCR requirement is met, loans close quickly with minimal documentation.

📌 Example:

• Property Monthly Rental Income: $3,000

• Total Monthly Mortgage Payment: $2,500

• DSCR = 1.2 (3,000 ÷ 2,500) – ✅ Qualifies for a DSCR loan!

DSCR Loan Requirements

✔️ Minimum DSCR Ratio – Most lenders require 1.0 or higher, but some approve below 1.0.

✔️ Credit Score – Typically 620+ (higher scores get better rates).

✔️ Down Payment – Usually 20-25% (varies by lender and DSCR ratio).

✔️ Property Types – Single-family, duplexes, triplexes, 4-units, condos, and mixed-use properties.

✔️ Loan Amounts – Up to $5 million, depending on property type and location.

Who Benefits from a DSCR Loan?

🏡 Real Estate Investors – Build or expand your investment portfolio.

🏡 Self-Employed Borrowers – No tax returns or W-2s required.

🏡 Foreign Nationals – Purchase U.S. investment properties without a Social Security Number.

🏡 Experienced & New Investors – Qualify based on property income, NOT personal income.

DSCR Loans vs. Traditional Investment Loans

💡 Key Takeaway: DSCR Loans provide easier, faster approval for investors who want to grow their real estate portfolio without income verification hassles.

How to Apply for a DSCR Loan

1️⃣ Pre-Qualification – We evaluate your credit, DSCR ratio, and loan options.

2️⃣ Property Appraisal & Rental Analysis – Determines market rent & property value.

3️⃣ Loan Approval & Underwriting – Faster process with minimal documentation.

4️⃣ Closing & Funding – Get your funds to secure the property & expand your investments.

Is a DSCR Loan Right for You?

If you’re a real estate investor looking for fast, flexible financing, a DSCR loan is an excellent option.

📞 Contact us today to discuss your investment goals and get pre-approved for a DSCR loan!