A DSCR loan (Debt Service Coverage Ratio loan) is a mortgage for real estate investors that qualifies on the rental income of the property instead of your personal income. There are no tax returns, no W-2s, no pay stubs, and no debt-to-income (DTI) calculation — if the property’s rent covers the payment, you can qualify.
It’s the most popular financing tool for buying and refinancing rental property in 2026 because it lets investors scale a portfolio without their personal income getting in the way. This guide explains exactly what a DSCR loan is, how it works, what it costs, and how to get one.
What Does DSCR Mean?
DSCR stands for Debt Service Coverage Ratio — a simple measure of whether a rental property’s income covers its mortgage payment.
The DSCR Formula
DSCR = Gross Monthly Rent ÷ Monthly Debt (PITIA)
PITIA = Principal + Interest + Taxes + Insurance + HOA. A 1.0 DSCR breaks even; higher ratios price better.
If a property rents for $2,400/month and the full payment (PITIA) is $2,000, the DSCR is 1.20 — the rent covers the payment 1.2× over. Most lenders look for 1.0 or higher, and we offer sub-1.0 and no-ratio options for thinner deals. Learn the math in our how to calculate DSCR guide.
How Does a DSCR Loan Work?
Because qualification is based on the property, the process skips everything a conventional lender drags you through:
- No income documentation — no tax returns, W-2s, pay stubs, or employment verification.
- No DTI — your personal debts don’t count against you.
- Qualify on rent — the appraiser’s market-rent estimate (Form 1007) or your lease sets the income.
- Close in an LLC — standard for investors; see our LLC DSCR loan guide.
- Unlimited properties — no Fannie/Freddie 10-property cap, so you can keep scaling.
Who Is a DSCR Loan For?
DSCR loans are built for real estate investors — not owner-occupants. They’re ideal if you’re self-employed, write off income on your taxes, own multiple properties, invest through an LLC, or are a foreign national. They work for long-term rentals and short-term rentals / Airbnb, and for first-time investors too.
What Can You Finance with a DSCR Loan?
- Single-family rentals (SFR) and condos
- 2–4 unit and 5+ unit multifamily
- Short-term / vacation rentals (qualified on AirDNA projections)
- Condotels and non-warrantable condos
- Purchase, rate-and-term refinance, and cash-out refinance
DSCR Loan Requirements (2026)
Typical Guidelines
- Credit score: 620 minimum; 720+ for the best pricing
- DSCR: 1.0+ preferred; sub-1.0 and no-ratio available
- Down payment: 20–25% (up to 85% LTV on purchase) — see down payment guide
- Reserves: typically 3–6 months PITIA
- Loan amounts: $100K to $5M+
Full details in our 2026 DSCR loan requirements guide.
DSCR Loan vs. Conventional Loan
A conventional mortgage qualifies you (income, DTI, tax returns). A DSCR loan qualifies the property. DSCR rates run modestly higher than conventional, but you trade that for speed, no income docs, no property cap, and LLC vesting — see the full DSCR vs. conventional comparison and DSCR loan pros and cons.
Frequently Asked Questions
See If You Qualify for a DSCR Loan
30-second check. No credit pull. No income docs.
Check My Eligibility →Related Reading
- How to Calculate Your DSCR Ratio
- 2026 DSCR Loan Requirements
- DSCR Loan vs. Conventional Loan
- DSCR Loan Down Payment & LTV
- State of DSCR Lending 2026 (Data Report)
DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548), a licensed mortgage broker. For business-purpose, non-owner-occupied investment properties only. Informational only; not a loan commitment or financial advice. Rates and terms subject to change. Equal Housing Lender.