DSCR Loan
A DSCR loan opens the door for investors to build wealth through real estate without the traditional income documentation many loan programs require. Instead of relying on pay stubs or complex tax returns, the loan decision is mainly based on whether the property’s rental income covers the mortgage payment. At Future Home Loans, we love helping investors take the next step in expanding their rental portfolios, whether it’s your first investment property or your fifteenth. If you’re looking for a financing option that aligns with real cash flow, a DSCR loan might be the perfect fit.
What is a DSCR Loan?
A DSCR Loan (Debt Service Coverage Ratio) is designed for real estate investors who want to qualify for financing based on a property’s rental income, not their personal income or tax returns. This makes it easier to purchase or refinance investment properties and grow your portfolio with flexible underwriting and strong cash-flow potential.
About DSCR Loan Rates
Because DSCR Loans are tailored for investment purposes rather than primary residences, rates may vary based on experience, credit, leverage, and property type. Many investors find that DSCR rates remain competitive, especially when the property shows strong rental potential and stable long-term cash flow.
DSCR Loan Requirements
Minimum Credit Score
Typically 660–700+ recommended
Minimum Down Payment
20% – 25%+ depending on credit, experience, and rental income strength.
MAX LTV
Commonly 75% – 80% LTV, subject to DSCR and investor guidelines.
Max DTI
DTI is often not evaluated, as qualification is based on rental income, not personal income.
What type of home can I buy with a DSCR Loan?
✔ Long-term rental properties
✔ Short-term / vacation rentals (Airbnb/VRBO with eligibility)
✔ Single-family homes
✔ 2–4 unit properties
✔ Condos & townhomes (program-dependent)
✔ Short-term / vacation rentals (Airbnb/VRBO with eligibility)
✔ Single-family homes
✔ 2–4 unit properties
✔ Condos & townhomes (program-dependent)
Who is eligible for a DSCR Loan?
DSCR Loans primarily evaluate the property, not the borrower’s personal income. General requirements may include:
Debt Service Coverage Ratio (DSCR): ≥ 1.0 (rental income covers payment)
Down Payment: 20% – 25%+ depending on property type and credit
Reserves: May require 3–12 months depending on loan size and experience
Property Eligibility: 1–4 unit rentals, condos, townhomes, and some short-term rentals
Debt Service Coverage Ratio (DSCR): ≥ 1.0 (rental income covers payment)
Down Payment: 20% – 25%+ depending on property type and credit
Reserves: May require 3–12 months depending on loan size and experience
Property Eligibility: 1–4 unit rentals, condos, townhomes, and some short-term rentals
How to Get Approved
To strengthen your application:
Choose a strong cash-flow property
Provide rental history or market rent estimates (appraiser can provide this)
Maintain solid credit (660–700+ recommended)
Prepare funds for down payment & reserves
You don’t need tax returns or personal income documentation, making DSCR a great option for self-employed and full-time investors.
Choose a strong cash-flow property
Provide rental history or market rent estimates (appraiser can provide this)
Maintain solid credit (660–700+ recommended)
Prepare funds for down payment & reserves
You don’t need tax returns or personal income documentation, making DSCR a great option for self-employed and full-time investors.
Ready to Move Forward?
Whether you’re just exploring loan options or you’re ready to begin the process, we’re here to make it easier. Get clear guidance, fast answers, and a pre-approval experience built around your goals.