DSCR loans for real estate investors

How it works

The lender compares the property's rent, from a lease or an appraiser's rent estimate, with its monthly costs: principal, interest, taxes, insurance and any HOA dues. That comparison is the debt service coverage ratio. Each lender sets its own target, and financing where rent doesn't fully cover the payment may be available through some wholesale lenders, subject to guidelines. Requirements vary by lender.

You'll still have a credit check and need funds for closing and reserves, but you usually won't need pay stubs, W-2s or tax returns to document income.

Who it fits

• Investors buying or refinancing rentals
• Self-employed investors with heavy write-offs
• Investors with several financed properties
• Buyers closing in an LLC, which may be available through some wholesale lenders, subject to guidelines
• Short-term rental owners, where that income may be accepted by some wholesale lenders, subject to guidelines

Property types

Single-family homes, condos, townhomes and small multi-unit properties are common. Short-term rentals and other property types may be available through some wholesale lenders, subject to guidelines. Requirements vary by lender.

Documents you may need

• Purchase contract or current mortgage statement
• Leases or an appraisal rent estimate
• Asset statements for down payment and reserves
• Insurance quote and HOA details
• LLC documents, if applicable

Pros and cons

Pros: Qualifies mainly on the property's rental income; LLC closings may be available through some wholesale lenders, subject to guidelines; works for purchase, refinance and cash-out.

Cons: Pricing and terms can differ from conventional investment loans; larger down payment or equity often required; some carry prepayment penalties; investment property only.

Why lender choice matters

DSCR guidelines, prepayment options and short-term rental rules differ a lot. We compare DSCR programs from wholesale lenders so you can choose.

Read our full DSCR loan guide for more.

How Turn Times helps

Turn Times is a licensed mortgage broker, not a lender. Instead of offering one company's products, we compare DSCR loan options from wholesale lenders and walk you through the differences in plain language. Here's how it usually goes:

1. Tell us your goal. A short conversation about the property, your timeline and what matters most to you.
2. We search pricing across wholesale lenders. We look at which wholesale lenders' guidelines may fit your situation, and a licensed loan officer compares their pricing and terms.
3. You choose. We lay out the trade-offs so you can pick the option that works for you.
4. We manage the loan to closing. Appraisal, title, conditions and updates along the way.

Every loan is subject to the lender's underwriting, and approval isn't guaranteed. We arrange loans for properties in California and Colorado.

Frequently asked questions