10/07/2026
A DSCR (Debt Service Coverage Ratio) loan is a type of real estate investment loan where qualification is primarily based on the cash flow generated by the property, rather than the borrower’s personal income or tax returns.
The DSCR measures the property’s ability to cover its debt obligations using its net operating income.
Key Features
Eligibility: Typically for non-owner-occupied investment properties such as single-family rentals, multifamily units, condos, townhomes, and mixed-use properties.
Loan Amounts: Ranges widely, often from $50,000 up to $10 million, depending on the lender and property type.
DSCR Requirement: Minimum DSCR usually starts at 1.0, meaning the property must generate at least enough income to cover its debt payments. Some programs allow for lower or no minimum DSCR.
Credit Score: Minimum FICO requirements generally range from 600 to 680, with some flexibility for strong property cash flow.
Documentation: No personal income verification is required; qualification is based on property income, appraisals, and rent rolls.
Borrower Types: Loans can be made to individuals, LLCs, corporations, and trusts.
Terms: Options include 30-year fixed, adjustable-rate, and interest-only loans.
Property Types: Eligible properties include single-family homes, 2–4 unit properties, multifamily (up to 10 units or more), condos, townhomes, and mixed-use buildings.
Use Cases: Purchase, refinance (rate & term or cash-out), and portfolio loans for multiple properties.
Advantages
Fast underwriting and closing processes.
No need for W-2s, paystubs, or tax returns.
Suitable for both new and experienced investors.
Flexible terms and property types, including short-term rentals and portfolios.
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