Investor
DSCR rental loans loans
The property qualifies. Your tax returns stay in the drawer.
What a DSCR rental loans loan actually is
A Debt Service Coverage Ratio loan qualifies on the property's income rather than yours. The ratio is gross monthly rent divided by the full monthly obligation: principal, interest, taxes, insurance and any association dues, collectively PITIA. A property renting for $2,400 against a $2,000 PITIA has a DSCR of 1.20.
There is no personal debt-to-income calculation, no tax returns, no W-2s and no employment verification. That is why Philadelphia's small-portfolio landlords, who write off aggressively and therefore show little taxable income, end up here. The trade-off is price: DSCR loans carry rates roughly 1.000% to 1.500% above owner-occupied conventional, a larger down payment, and a prepayment penalty on most structures.
Best suited to
- Landlords with three or more properties and heavily depreciated tax returns
- Self-employed investors whose declared income will not support agency debt ratios
- Buyers who have hit the ten-financed-property agency limit
- Short-term rental operators with a documented twelve-month history
What comes with the loan
- DSCR calculated from a Form 1007 market rent schedule or the actual lease, whichever supports the file
- Entity closings in an LLC at no additional charge, which most investors prefer for liability
- Short-term rental income accepted on a documented twelve-month operating history
- Interest-only option that raises DSCR materially on a tight file
- Prepayment penalty buyout priced in points so you can compare holding periods
- Portfolio pricing when three or more properties close together
How a file moves
- 01
Run the ratio first
Rent divided by estimated PITIA. If it lands under 1.00 we discuss a larger down payment, interest only, or a different property.
- 02
Application
Entity documents, a credit pull, reserves and the subject property. No personal income documentation at all.
- 03
Appraisal with rent schedule
Form 1004 plus Form 1007 market rent. On two to four units, Form 1025 with an operating income statement.
- 04
Underwriting
Focused on the property, the ratio, reserves and the entity. Median application to clear-to-close is 19 business days (sample figure).
- 05
Closing
In the LLC name, with the member guaranty. Title in the entity from day one avoids a later transfer.
Why borrowers choose it
No personal DTI
Your other mortgages, your write-offs and your W-2 history are irrelevant to the approval.
Unlimited financed properties
Agency guidelines cap you at ten financed properties. DSCR does not.
Close in an entity
LLC ownership from the start, with no additional fee and no due-on-sale problem later.
Interest-only lifts the ratio
A 10-year interest-only period cuts PITIA and can move a 0.98 DSCR to 1.14 on the same property.
What to watch out for
- Rates run 1.000% to 1.500% above owner-occupied conventional. Price that into the return, not the rate sheet.
- Prepayment penalties are standard. A five-year step-down makes a two-year flip expensive.
- A DSCR below 1.00 is a no-ratio loan: higher price, 25% down minimum, and not every investor will do it.
DSCR rental loans questions we get asked
Still unclear? Call (215) 555-0145 and ask for the investor desk.
All questionsGross monthly rent divided by PITIA, which is principal, interest, taxes, insurance and any association dues. Rent comes from the actual lease or the appraiser's Form 1007 market rent, whichever we can support. A $2,400 rent against $2,000 PITIA is 1.20.
1.10 or better for standard pricing, and 1.25 or better for our best tier. Between 1.00 and 1.09 we add roughly 0.375% in rate. Below 1.00 it becomes a no-ratio loan with a minimum 25% down payment and a further adjustment.
Yes, with a twelve-month operating history documented through the platform statements or a property manager's report. We use a trailing twelve-month average rather than peak season. Without that history we will underwrite to long-term market rent instead.
Yes, and most of our DSCR borrowers do. There is no additional fee. The members provide a personal guaranty, and title is in the entity from closing, which avoids transferring later and triggering a due-on-sale clause.
Programs worth comparing
Portfolio blanket loans
5 to 40 doors under one note, one payment, one closing
Fix and flip
To 85% of purchase and 100% of rehab, drawn in stages
Bridge loans
12-month interest only, buy before your current home sells
Find out if DSCR rental loans fits
Fifteen minutes, a soft credit pull, and a straight answer about which program actually suits your file.
No application fee. Soft credit pull at pre-qualification. Flat $1,095 origination at closing.