Our DSCR loan program is built to help both new and seasoned real estate investors finance their properties, with qualification based on the income the investment generates.
A DSCR loan qualifies borrowers based on the cash flow of an investment property instead of their personal income. Also called investor cash flow loans, these programs are commonly used by real estate investors to secure financing for investment properties.
The debt service coverage ratio (DSCR) compares an investment property’s net operating income to its total debt payments. It helps determine whether the property generates enough cash flow to cover its debt obligations.
DSCR is used in business, government, and personal finances, but it’s especially common in real estate. The ratio indicates whether an investment property’s cash flow is sufficient to cover its mortgage payments.
A higher DSCR indicates a stronger ratio. A DSCR above 1 means the property generates positive cash flow and can meet its debt obligations. Generally, a DSCR of 1.25 or higher is considered strong and reliable for investors
When a borrower applies for a traditional mortgage, we review their income to determine how much they can afford to pay each month. The main metric used is the debt-to-income ratio (DTI), which shows the percentage of monthly income that goes toward debt.
For investment properties, we offer DSCR loans. Instead of focusing on the borrower’s personal income, we evaluate the property’s expected monthly rent. And rather than using DTI to determine eligibility, we rely on the debt service coverage ratio (DSCR) to assess whether the property can cover its mortgage payments.
While DSCR loans don’t follow the exact same guidelines as Conventional mortgages, real estate investors still need to meet certain requirements to qualify.
DSCR: Most lenders require a ratio between 1 and 1.5, with 1.25 being the common minimum. We can go as low as zero.
Credit Score: Typical minimums range from 620 to 700. We accept scores starting at 620.
Down Payment: Most DSCR loans require at least 20% down (LTV up to 80%). We also offer LTVs up to 80%.
Cash Reserves: Lenders often ask for six months of reserves, but we only require three months.
Loan Amount: Many institutions cap DSCR loans at $2 million. We offer loans up to $3.5 million.
Prepayment Penalty: Unlike Conventional loans, some DSCR loans come with prepayment penalties. We provide options up to five years.
With flexible requirements like these, DSCR loans provide real estate investors with financing options that better fit their goals and properties.
For investment properties, we offer DSCR loans. Instead of focusing on the borrower’s personal income, we evaluate the property’s expected monthly rent. And rather than using DTI to determine eligibility, we rely on the debt service coverage ratio (DSCR) to assess whether the property can cover its mortgage payments.
DSCR loans offer unique benefits for real estate investors:
Qualification based on rental income: Instead of looking at the borrower’s personal income, DSCR loans use the property’s rental income to determine eligibility. This allows investors to purchase properties even if their income would make them ineligible for Conventional loans.
No employment verification: Since personal income isn’t considered, there’s no need for employment verification.
Unlimited investment opportunities: Unlike Conventional mortgages, which may limit the number of rental properties a borrower can finance, DSCR loans generally allow investors to take out multiple loans.
Faster closings: With simpler documentation, DSCR loans can often close more quickly than Conventional mortgages.
Take the first step toward your investment goals—our team is here to guide you through the process and make financing simple.
