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Investment property

DSCR rental loan

The short answer A debt-service-coverage-ratio (DSCR) loan focuses on the rental property's income compared with its required debt payment, using the lender's own formula. These business-purpose loans usually serve non-owner-occupied properties. Less personal-income paperwork does not remove credit, appraisal, equity, reserve or property requirements.

Last reviewed: October 18, 2026 · General education, not a loan offer or approval. Availability and terms depend on the lender, the property and your file.

It may fit if

  • You are buying or refinancing a rental you won't live in.
  • Your tax returns don't fully show your income, or you own several rentals.
  • The property's rent can support its payment under the lender's formula.

Tradeoffs to weigh

  • Pricing and down payment requirements are often higher than for conventional loans.
  • Some DSCR loans carry a prepayment penalty that affects your exit plan.
  • A good ratio doesn't prove the property is profitable after real expenses.

What to have ready

  • The property address and type, and the number of units.
  • Current lease or expected market rent.
  • Your rental strategy: long-term, short-term or other.
  • Estimated taxes, insurance and association dues.
  • How long you plan to hold the property.

Questions people ask

What is a DSCR of 1.00?

Under the lender's formula, eligible income equals the payment being measured. It is not a universal approval threshold.

Does DSCR prove the property is profitable?

No. Your real operating expenses, vacancies, repairs and reserves also matter.

Your next step

Tell me what you're trying to do. I'll check which options fit your situation and walk you through the tradeoffs.

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Related topics

Conventional investment property mortgage Short-term rental financing Fix-and-flip financing Bridge financing Hard-money and private-money financing Portfolio or blanket financing See the loan programs All topics
Marcus Wright
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Marcus Wright · Loan Officer, NMLS #2789841

Originates through Q Mortgage LLC, NMLS #2567464. Licensed in Texas.

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  2. 2. I compare your optionsI look at your income, property and plans, and explain the costs and tradeoffs of each route in plain language.
  3. 3. Apply when you're readyYou apply through a secure application. The lender's underwriting makes the final decision, and I keep you updated until closing.
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