DSCR loans — Debt Service Coverage Ratio loans — are the dominant financing tool for real estate investors in 2026 because they qualify based on the property's cash flow rather than the borrower's income. That makes them faster, simpler, and accessible to a wider range of investors than conventional financing.
This guide is the complete current-year requirements list: credit, DSCR, LTV, reserves, property types, borrower entities, and the documentation you'll actually need to provide. Use it to self-assess before applying.
1. Minimum Credit Score
The floor is 620 FICO. Pricing tiers in 2026 typically scale as follows:
| Credit Score | Max LTV | Rate Tier |
|---|---|---|
| 740+ | Up to 85% | Best |
| 720 – 739 | Up to 80% | Strong |
| 680 – 719 | Up to 80% | Standard |
| 660 – 679 | Up to 75% | Adjusted |
| 620 – 659 | Up to 75% | Adjusted (rate add-on) |
The middle credit score from your three-bureau pull is used (or the lower of two if only two scores are reported). Tradeline depth — typically three open tradelines for 12+ months — is also evaluated.
2. Minimum DSCR Ratio
The DSCR is gross monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, HOA). DSCR Capital Partners offers programs across the full ratio spectrum:
| DSCR | Pricing Impact | Notes |
|---|---|---|
| 1.25+ | Best pricing | Strong cash-flowing property |
| 1.00 – 1.24 | Standard pricing | Property breaks even or better |
| 0.75 – 0.99 | Rate add-on | Negative-cash-flow programs |
| Below 0.75 | Case-by-case | Strong credit and reserves required |
For long-term rentals, the qualifying rent is the lower of (a) the executed lease and (b) the appraiser's market rent comparable. For short-term rentals, an AirDNA report is used.
3. Loan-to-Value (LTV)
- Purchase: Up to 85% LTV (with 740+ credit, DSCR ≥ 1.10)
- Rate-and-term refinance: Up to 80% LTV
- Cash-out refinance: Up to 75% LTV (occasionally 80% for top-tier files)
LTV is determined by the lower of the appraised value and the contract price (purchase) or the appraised value alone (refinance).
4. Cash Reserves
Reserves are liquid assets you must hold at closing, measured in months of PITIA. Typical 2026 requirements:
- Loan amount under $1M: 3 months PITIA reserves
- $1M – $2M: 6 months PITIA reserves
- Over $2M: 9–12 months PITIA reserves
- Cash-out refi proceeds: Can usually count toward reserves
- Retirement accounts: 60–70% of vested balance counts
5. Eligible Property Types
- Single-Family Residences (SFR)
- Warrantable and non-warrantable condos
- Townhomes & PUDs
- 2–4 unit residential
- 5+ unit small multifamily (separate program)
- Condotels (with rental program)
- Short-term rentals (Airbnb / VRBO)
- Mixed-use, with majority residential income
Properties not eligible: rural agricultural, vacant land, manufactured homes built pre-1976, properties with active code violations, and (in most cases) co-ops.
6. Eligible Borrower Types
- U.S. citizens
- Permanent and non-permanent resident aliens
- Foreign nationals (specialized program)
- Single-member and multi-member LLCs
- S-corps and C-corps
- Limited partnerships
- Revocable living trusts (case-by-case)
For LLC and corporate borrowers, an operating agreement and EIN are required. There is no requirement for the LLC to have an operating history.
7. Loan Amount & Terms
- Minimum loan: $100,000
- Maximum loan: $15,000,000 (single property)
- Term options: 30-year fixed, 5/6 ARM, 7/6 ARM, 10/6 ARM
- Interest-only options: Available — typically 10-year IO followed by 20-year amortization
- Prepayment penalty: Standard 3-year, 5-year step-down options. No-prepay programs available with rate add-on.
8. Required Documentation
The DSCR loan documentation list is significantly shorter than a conventional mortgage. Here's what you'll actually provide:
DSCR Loan Document Checklist
- Completed loan application (1003)
- Government-issued photo ID
- Purchase contract (purchase) or current mortgage statement (refinance)
- Existing lease agreement (long-term) or AirDNA rental projection (short-term)
- Two months of bank statements (reserves verification)
- LLC operating agreement and EIN letter (entity borrowers)
- Insurance binder (prior to closing)
- Credit authorization
Notably not required: tax returns, W-2s, pay stubs, employment verification, profit & loss statements, debt-to-income calculation, asset depletion analysis.
9. Property Appraisal
An independent appraisal is required for every DSCR loan. The appraisal serves two functions: it establishes the property value (for LTV) and it produces the market rent comparable used to calculate DSCR. For short-term rentals, an AirDNA market analysis is paired with the appraisal.
10. Title, Insurance, and Closing
- Title insurance: Standard ALTA lender's policy required
- Hazard insurance: Replacement cost coverage with lender as mortgagee
- Flood insurance: Required if property is in a designated flood zone
- Loss-of-rent coverage: Often required (typically 6 months)
- Closing timeline: 21–30 days from contract to close, typical
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Related Guides
- DSCR Loan vs. Conventional Loan
- DSCR Loan vs. Hard Money
- DSCR Loan With a 620 Credit Score
- DSCR Loans for Foreign Nationals
- How to Calculate Your DSCR Ratio
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DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548), a licensed mortgage broker. Informational only; not a loan commitment. Equal Housing Lender.