Rental Property Loans (AKA DSCR)
A DSCR (Debt Service Coverage Ratio) loan is a type of real estate loan for investors that qualifies the borrower based on a property’s income-generating potential, rather than their personal income. You can qualify for maximum loan amounts and best interest rates when the property DSCR is = or > than 1.0x and you present a strong credit score (typically above 720+).
- Coverage types
- DSCR > 1.0: The property generates enough income to cover all its debt obligations. A higher ratio, such as 1.25, is often preferred by lenders, indicating a healthier cash flow and less risk.
- DSCR = 1.0: The property’s income exactly matches its expenses, breaking even.
- DSCR < 1.0: The property does not generate enough income to cover its debts, indicating a negative cash flow.
- First time homebuyer and first time investor allowed (on select loan programs)
| Down payment | As little as 20% down (in most cases) |
| Loan Amounts | Up to $4,000,000 |
| Options | Purchase, refinance and cash out |
| Property types | Single family 1-4 units, Multifamily 5-10 units, condos, Townhomes |
| Credit score minimums | 660 generally (select options with 600+) |