Debt Service Coverage Ratio (DSCR) Loan: Use Rental Income to Qualify for Investment Properties

A DSCR loan allows real estate investors to secure financing based on the rental income of a property rather than their personal income. If you cannot qualify for a conventional loan, DSCR loans are a great option.

• Accessible for real estate investors

• Unlimited Cash Out

• No Limit on the number of properties

• All types or rentals are eligible

  
  

Qualify for a home loan without using your tax returns with a DSCR loan program. As a real estate investor, you can avoid high rates and high points of private loans, lengthy approval processes, and strict lending criteria with a debt service coverage ratio loan, which is a type of no-income loan. Qualify for a loan based on your property’s cash flow, not your income.

Securing a debt service coverage ratio loan can help you expand your investment portfolio easier than ever before. Read on to learn more about what a DSCR loan is, how it works, and DSCR loan requirements.

KEY TAKEAWAYS

• The debt service coverage ratio (DSCR) is a number that measures a property’s current rental income compared to its debt obligations. A DSCR above 1.0 indicates positive cash flow, while a DSCR below 1.0 indicates negative cash flow.

• A DSCR loan allows a borrower to qualify for financing based on the projected rental income of a property rather than personal income.

• DSCR loans are designed for real estate investors and can only be used to purchase income-generating properties. DSCR loans can’t be used to buy a primary residence or a fixer upper.