Question 1

What is a DSCR loan?

Accepted Answer

A DSCR loan is an investment property loan that qualifies you on the rental income the property earns rather than on your personal income. DSCR stands for debt service coverage ratio, which compares monthly rent with the monthly payment.

Question 2

What does a DSCR of 1.00 mean?

Accepted Answer

It means rent equals the full monthly payment. Above 1.00 the property earns more than it costs to finance. Below 1.00 the rent does not cover the payment.

Question 3

Do I need tax returns or pay stubs?

Accepted Answer

No. DSCR loans do not ask for W-2s, pay stubs, or tax returns. You provide property documents, entity papers if applicable, and proof of funds.

Question 4

Can I get a DSCR loan on my primary home?

Accepted Answer

No. These are business purpose loans for investment properties only.

Question 5

What credit score do I need?

Accepted Answer

Programs generally begin at 620. Higher scores usually bring lower pricing and more flexible terms.

Question 6

How much down payment is required?

Accepted Answer

Typically 20 to 25 percent on a purchase. The loan-to-value cap is up to 75 percent on eligible deals. Lower credit, vacant units, and short-term rentals can raise the down payment.

Question 7

What property types are eligible?

Accepted Answer

Single family homes, condos, townhomes, and 2 to 4 unit properties. Five to eight unit buildings are available on dedicated programs.

Question 8

How many properties can I finance?

Accepted Answer

There is no set cap on the number of DSCR loans you can hold. Each loan is judged on its own property.

Question 9

Do I need experience as a landlord?

Accepted Answer

Not always. Some programs welcome first-time investors, though terms can be stricter.

Question 10

How fast can a DSCR loan close?

Accepted Answer

Many close in 7 to 14 days when documents are ready and the appraisal is on time. Complex files or slow appraisals can take longer.

Question 11

Will getting a quote affect my credit?

Accepted Answer

No. Our quote form does not run your credit. A hard pull happens only when you move forward with a full application.

Question 12

What documents will I need?

Accepted Answer

A contract or current mortgage statement, a lease if the property is occupied, ID, bank statements for reserves, proof of insurance, and entity documents if you are borrowing in an LLC.

Question 13

Can I close in an LLC?

Accepted Answer

Yes. Entity borrowers are common. The owner usually signs a personal guaranty.

Question 14

Are DSCR rates higher than conventional rates?

Accepted Answer

Usually somewhat higher, since the loan skips income verification and allows more flexible structures. Your rate depends on credit, loan-to-value, DSCR, and property type.

Question 15

Is there a prepayment penalty?

Accepted Answer

Many DSCR loans have one for the first few years. Your terms spell out the schedule before you sign, and some options reduce or remove it.

Question 16

Can I get an interest-only loan?

Accepted Answer

Interest-only options are available on eligible loans. They lower the monthly payment during the interest-only period, which can raise the DSCR.

Question 17

What are reserves?

Accepted Answer

Reserves are liquid funds you hold after closing, usually described in months of payments. They show the lender you can cover a gap in rent.

Straight answers about DSCR loans.

The basics

Eligibility

Process and timing

Costs and terms

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