DSCR / Investor Loans
A DSCR loan — debt-service coverage ratio — is an investor mortgage that qualifies you based on the property’s rental income, not your personal income. The property has to carry itself; your W-2s and tax returns largely stay out of it.
That’s a fundamental flip from a normal mortgage. Instead of “can you afford this payment,” the question becomes “can this property afford its own payment.” For investors building a portfolio, it removes the biggest bottleneck in traditional qualifying.
These are business-purpose loans for investment properties — not for homes you’ll live in — and they’re priced for investor risk. Used correctly, they’re the engine of a rental portfolio.
Equal Housing Opportunity. All loans subject to credit approval. Terms and conditions apply.
At a glance
- Down payment
- Higher down payments are typical — investor loans expect meaningful skin in the game
- Loan purpose
- Purchase or refinance of 1–4 unit investment properties — not primary residences
- Who it’s for
- Real estate investors who want to qualify on the property’s cash flow rather than personal income
- Qualifying metric
- DSCR — the ratio of the property’s rental income to its mortgage payment. At or above 1.0 means the rent covers the payment
How it works
Find a property with real cash flow
Start with the numbers: realistic rent for the area versus the all-in payment. I’ll sanity-check the math with you before you make an offer.
Rent analysis
An appraiser or rent schedule establishes market rent. Lenders use the lower of actual or market rent — conservative by design.
DSCR calculation
The lender divides monthly rental income by the monthly housing payment (principal, interest, taxes, insurance). That ratio drives approval and pricing.
Light-touch personal qualifying
Your personal income isn’t the basis, but lenders still check credit, reserves, and your track record. First-time investors can qualify — the property just has to work.
Close and collect rent
Close like any other loan. Then the property pays for itself — that’s the whole thesis.
Good to know (honest trade-offs)
Understand the DSCR ratio
A DSCR of 1.0 means rental income exactly covers the mortgage payment; above 1.0 means positive cash flow. Some programs allow ratios slightly below 1.0, but expect higher rates and bigger down payments there — the lender is betting on your reserves and experience.
Rates run higher than primary-residence loans
Investor loans are priced for investor risk — rates and fees above what you’d pay on your own home. Underwrite the deal at the real numbers, not wishful ones.
Not for homes you’ll live in
DSCR loans are business-purpose loans for investment properties. Misrepresenting occupancy is mortgage fraud — full stop. Buying your own home? Use an owner-occupied program.
Reserves and experience are weighed
Lenders like to see cash reserves and, for larger portfolios, a track record. First-timers aren’t excluded, but the property’s numbers have to be clean.
Short-term rentals need the right program
Standard DSCR programs underwrite long-term market rents. If your strategy is short-term rental, say so upfront — there are programs built for it, and using the wrong one creates problems.
Is this right for you?
DSCR lending fits when you’re buying investment property and either can’t or don’t want to qualify on personal income — whether you’re self-employed with complex taxes, at your personal debt-to-income ceiling, or simply keeping your personal borrowing capacity free. It’s also the cleanest path to scaling beyond a couple of doors.
It’s the wrong tool when the property doesn’t cash flow at realistic rents, or when you’re stretching to make the ratio work with optimistic assumptions. I’d rather talk you out of a bad deal than close one — the numbers have to work on paper before they’ll work in real life.
Frequently asked questions
What DSCR ratio do I need?
Many programs target 1.0 or higher — rent covering the full housing payment. Some allow slightly below 1.0 with adjusted pricing and down payment. We’ll run your property’s numbers and see which programs it fits.
Do I need landlord experience?
Not necessarily — first-time investors use DSCR loans regularly. Experience helps with pricing and program choice on larger portfolios, but a strong property can carry a first-timer.
Can I use a DSCR loan for a property I’ll live in?
No. These are business-purpose loans for non-owner-occupied properties. If you’ll live there, owner-occupied programs (conventional, FHA, VA) apply — and they’re generally cheaper anyway.
How is rental income verified?
Typically via an appraiser’s rent schedule or a market rent analysis, using the lower of actual current rent or market rent. Documented leases strengthen the file.
Can I buy in an LLC?
Many DSCR programs allow closing in an LLC, which investors often prefer for liability structure. Tell me your entity plans upfront so we match you with a program that accommodates them.
How many investment properties can I finance?
DSCR programs don’t cap you the way conventional investor guidelines do — the constraint is deal quality, not a loan count. That’s precisely why portfolio investors favor them.
Talk it through with Jet Ameti
Every situation is different — and program guidelines change. Tell me where you stand and I'll give you a straight answer on whether DSCR / Investor fits, and what else might. Subject to credit and property approval.
Important: All calculations on this site are estimates for educational purposes only and do not constitute a loan offer, approval, or commitment to lend. Your actual rate, payment, and terms depend on credit approval and will be provided by your loan officer.