Question 1

What is a DSCR loan?

Accepted Answer

A Debt-Service Coverage Ratio (DSCR) loan is an investment-property loan that qualifies borrowers based on the rental income of the property rather than personal income. It's designed for real estate investors who don't want to document W-2s or tax returns.

Question 2

What DSCR ratio do I need?

Accepted Answer

Most lenders look for a DSCR of at least 1.0, meaning the property's rent covers the full mortgage payment (PITIA). Best pricing usually starts at 1.25 or higher. Some programs allow ratios below 1.0 with higher rates or larger down payments.

Question 3

Do I need to show tax returns or pay stubs?

Accepted Answer

No. DSCR loans require no personal income documentation — just credit, assets for down payment/reserves, and a rent schedule (long-term or short-term) from the appraisal or lease.

Question 4

What down payment do DSCR loans require?

Accepted Answer

Typically 20-25% down for purchases and 25-30% for cash-out refinances. Reserve requirements of 3-6 months of PITIA per property are common.

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