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DSCR loans (investment property)
Qualify mainly on the property’s rent compared with its payment.
What it is
A DSCR (debt-service coverage ratio) loan looks mainly at whether the property’s rent covers its monthly payment (principal, interest, taxes, insurance and HOA dues). It’s for investment properties, not your own home, and isn’t a government or Fannie Mae/Freddie Mac loan; each lender sets its own rules.
Who it fits
- Real estate investors
- Buyers whose tax returns don’t show the income lenders need for a standard loan
How it works
- The lender compares expected rent (often from the appraisal) with the full payment.
- Down payment, reserves, credit and pricing are set by each lender.
Benefits
- Less reliance on personal income documents
- Can work for buyers adding rentals
Tradeoffs
- Larger down payments and reserves are common
- Pricing is usually different from conventional loans
- Condo and short-term rental rules vary
Typical documents
- Lease or rent estimate
- Asset statements for down payment and reserves
- Entity documents if buying in an LLC
Your lender may ask for more or less. Full list: 1-page document checklist (PDF).
Common myth: “DSCR means no documents.” Not true: lenders still verify assets, credit, the property and the rent.
More on self-employed, investor and second-look loans.
Last checked October 17, 2026. Sources: CFPB, What is a Qualified Mortgage?
Availability depends on the lender and program funding; ask me which ones I can use for your loan.
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