DSCR Loans are based on the property’s Debt Service Coverage Ratio.

DSCR loans, or Debt Service Coverage Ratio loans, rely on the gap between the loan payment and rental income. This difference represents the landlord’s gross profit. These loans offer extended terms and are structured around continuous payment streams. People commonly utilize DSCR loans for two primary purposes: acquiring ready-to-go properties or refinancing for a cash-out option on their existing real estate holdings.”

No personal income or tax returns needed, and you’ll never sign a 4506.

A DSCR Loan is a special mortgage for homes that make money. Instead of looking at your income, it focuses on how much money the property can make. Unlike regular home loans that need proof of your income, DSCR Loans don’t.

They’re great for real estate investors who want to grow big (no more need for paycheck proof!) or want to skip the hassle and paperwork of regular loans. DSCR Loans are becoming popular among real estate investors.

Who are DSCR Loans For?

DSCR Loans are tailored for investors who want to profit from rental properties, making them an excellent choice for a wide range of situations. Whether you’re just starting out as a real estate investor or an experienced pro aiming to grow your portfolio, DSCR Loans are versatile and can work for you. What makes DSCR Loans particularly attractive is their flexibility and straightforward qualification process. Unlike traditional financing, which must adhere to strict rules set by agencies like Fannie Mae and Freddie Mac, DSCR Loans offer a more accommodating path to property investment success.”

DSCR Loans are generally a great loan option for:

Self Employed people looking to invest in real estate.

People who invest in real Estate with partners.

Investors looking for short term rental investments.

What documents are required for a DSCR Loan?

Application: This is a document ith basic details about you and the property. We will walk you through this.

Credit Authorization: Typically the lender will run a credit report.

Leases: If the property is leased you will provide the leases to show the rental income

Short term Rental History: If the property is used for a short term rentals (VRBO, Air BNB, Vacasa for example) and there are 12 months of operating history available typically that is provided by the property manager or booking platform.

Insurance: Property insurance is required with the lender’s information included.

Entity documents: If you are borrowing through a vehicle such as an LLC you will need to provide those documents (Certificates of Good Standing, Certificate of Formation, Articles of Organization and Operating Agreement)

Renovation documents: For rehab properties typically these items from the renovation will be required (Receipts, Invoices, Work Orders).

Also required and collected by the lender will be: 

Appraisal Report
Appraisal Review
Title Insurance

You will notice the absence of personal tax returns and employment verification. DSCR loans are about the property and the project.