DSCR loans: qualify on the rent, not your tax returns.

A mortgage for investment property that qualifies on the property's income. The lender compares monthly rent with the monthly payment — principal, interest, taxes, insurance and HOA — instead of reviewing your tax returns or debt-to-income ratio. It's a business-purpose loan, so the property must be a rental, and you can close in your own name or an LLC.

Debt service coverage ratio. It's the number a DSCR lender uses in place of your income: the property's monthly rent divided by its monthly principal, interest, taxes, insurance and HOA dues. A house renting for $2,400 with a $1,930 monthly payment has a DSCR of 1.24, which clears the minimum at most lenders.

For approval, 1.00 or higher clears most lenders. For the best terms, aim for 1.20–1.25 or more: Lima One saves its top pricing and highest leverage for 1.20 and up, and Griffin Funding's best pricing starts at 1.25. Keep in mind the ratio ignores vacancy and repairs, so a property at 1.00 won't cash-flow in practice.

Most lenders look for 1.00 or higher. Some accept 0.75–0.80, and a few offer no-ratio loans, usually with a larger down payment and a higher rate. A DSCR of 1.25 or more typically earns the best pricing. Floors differ by lender: Roc Capital and Civic want 1.05, while Kiavi accepts 0.80.

Yes. Most DSCR lenders don't require prior rental experience. Some set lower leverage or a higher credit minimum for first-time investors, which is why the form asks about experience. One published matrix, for example, asks first-time investors for a 700+ score, a DSCR above 1.00 and 12 months of reserves.

No. DSCR loans are business-purpose loans for investment property only. Neither you nor a family member can live in the property. If you plan to live there, you need a residential mortgage. That includes a second home or vacation home you plan to use yourself.

No. Many lenders finance Airbnb and VRBO homes, sizing the loan on 12 months of booking history or a third-party income projection such as AirDNA. Lenders usually discount that income; one published matrix counts 80% of gross short-term rents. See short-term rental loans.

Yes. Without a lease, lenders use the appraiser's market rent, and some discount it: Roc Capital and Civic count 90% of market rent on a vacant property, and Lima One forecasts rent from comparable homes. Signing a lease at market rent before you close or refinance can lift the ratio. A house that needs work first usually belongs on a rehab or bridge loan.

Yes, at many lenders. Interest-only periods usually run 10 years on a 30- or 40-year loan, and one published matrix caps them at 75% LTV and ratios of 0.75 or more. Lenders that qualify on the interest-only payment lift your DSCR: in the worked example above, $1,359 of interest replaces $1,535 of P&I and the ratio rises from 1.24 to 1.37.

Yes. One- to four-unit properties are standard, and some lenders go further: Lima One to 9 units and Easy Street to 10, including mixed-use. The DSCR adds up the rent from every unit and divides it by the one payment. Leverage can be lower than on a single-family home; Defy's 85% LTV, for example, applies to single-family only.

Yes, at many lenders, usually with more equity. Roc Capital and Civic publish 65% loan-to-value for foreign nationals, and Angel Oak and Defy 70%. Expect larger reserves — Angel Oak's foreign national program asks for 12 months — and entity rules: Easy Street lends to an LLC only if it is at least 50% US-owned.

No. DSCR compares gross rent with PITIA only. Cash flow is what's left after every cost, including vacancy, repairs, management and capital items the ratio leaves out. A property at 1.25 keeps 20% of its rent after PITIA; if your operating costs run higher than that, it loses money even though the lender sees a healthy ratio.

Usually. A 5-4-3-2-1 step-down over five years is the most common. Shorter penalties or none are available, typically in exchange for a higher rate. Under a 5-4-3-2-1, paying off a $225,000 balance in year one costs 5%, or $11,250; in year four it's 2%, or $4,500, and after year five nothing.

Most lenders published an 80% maximum loan-to-value on purchases in October 2026, so plan on 20–25% down plus closing costs and any required reserves. A few lenders go to 85% for 720–740+ credit. Cash-out refinances usually top out around 75% of value.

Published minimums run from 620 to 680 depending on the lender. Lenders price in 20-point bands, so moving from 680 to 720 can lower your rate and raise your maximum leverage; the best terms usually start around 740. Griffin Funding publishes the lowest minimum we found, 620, and Angel Oak the highest, 680.

About two to five weeks. The appraisal — which includes a rent schedule estimating market rent — usually takes the longest. Having your lease, entity documents and bank statements ready shortens it. Published timelines run from 14–21 days at Defy to an average of 34 days at Griffin Funding.

Yes. DSCR lenders lend to LLCs and corporations, usually with a personal guarantee from the owners, and Lima One, Roc Capital and Civic require an entity. You'll provide the articles of organization, operating agreement, EIN letter and a certificate of good standing.