A DSCR loan program is a type of real-estate investment loan that’s approved based on the property’s cash flow, not the borrower’s personal income.
DSCR = Debt Service Coverage Ratio It measures how well a property’s rental income covers its mortgage payments.
Formula: DSCR = Gross Rental Income ÷ Total Mortgage Payment (PITI + HOA)
No personal income verification (no W-2s, tax returns, or pay stubs)
Approval is based on the property’s ability to pay for itself
Faster, easier closing
Allows multiple financed properties
Works for short-term rentals (Airbnb), long-term rentals, and multi-units
Minimum DSCR: Usually 1.00–1.25, but some lenders allow <1.0 with higher rates
Credit score: Typically 620+
Down payment: Usually 20–25%
Property types: 1–4 units, condos, townhomes, some lenders allow 5–8 units
Loan purpose: Purchase, refinance, or cash-out refinance
If a rental property brings in $2,000/mo and the mortgage payment will be $1,600/mo:
DSCR = 2000 ÷ 1600 = 1.25 → Approved by most lenders.
