What is a DSCR Loan?

A debt service coverage ratio, or DSCR, compares a property’s qualifying rental income with its required debt payments. A DSCR loan may allow an investor to qualify primarily through the property’s cash-flow potential rather than a traditional personal-income analysis.

DSCR loan programs are available through Mike in 40 states. Program availability, property eligibility, documentation, loan-to-value limits, and underwriting standards vary by lender and location.

This option may be worth exploring if you:

• Are purchasing or refinancing a rental property.

• Want the property’s rental income to play a central role in qualification.

• Are self-employed or have income that is complex to document traditionally.

• Are growing a real estate portfolio and want to compare investor-focused options.

Common uses

• Purchasing a long-term rental property.

• Refinancing an eligible investment property.

• Accessing equity when an eligible cash-out option is available.

• Adding properties to an established or growing rental portfolio.

What to expect

The lender may evaluate rental income, the proposed housing payment, property value, credit, reserves, experience, entity structure, and other program-specific factors. Some programs may use an appraisal-supported market-rent estimate, while others may consider an eligible lease.

Because DSCR programs vary, I will review the property, estimated income, financing request, and investment goals before identifying potential options. No program or approval is guaranteed.

Have a property or deal in mind? Share the property address, expected rent, purchase price or estimated value, and financing goal. I will help you explore DSCR options that may fit the deal.