Overview
DSCR (Debt Service Coverage Ratio) loans qualify based on the rental income of the subject property, not your personal tax returns. They're a powerful tool for investors who don't want to document personal income or who are scaling beyond conventional limits.
Benefits
- No tax returns or W-2s required
- Qualify on rental income coverage
- No limit on number of financed properties
- Available for short-term rentals in many markets
Eligibility
- DSCR generally 1.0+ (varies by program)
- Typically 20-25% down
- 660+ FICO common
Cincinnati scenario
A self-employed investor adding a fourth rental in Hamilton, OH. DSCR avoids the tax-return drama and closes in three weeks.
Frequently Asked Questions
Most programs want a DSCR of at least 1.0 (rental income covers the debt). Better ratios get better pricing. Some programs allow sub-1.0 with stronger down payment.