A DSCR loan is a rental property loan that qualifies on the property's income instead of yours. The lender compares the monthly rent to the monthly payment (principal, interest, taxes, insurance and any HOA). If the rent covers the payment, the property can qualify. No tax returns, W-2s or debt-to-income ratio.
What DSCR stands for
DSCR means debt service coverage ratio. It's one number that tells a lender whether a rental pays for itself:
DSCR = monthly rent ÷ monthly payment
- Above 1.00: the rent covers the payment with room to spare. A DSCR of 1.25 means the rent is 25% more than the payment.
- Exactly 1.00: the rent covers the payment and nothing more.
- Below 1.00: the rent doesn't fully cover the payment. Many lenders stop here, but some of our programs have no minimum DSCR.
Want to check a property? Use the DSCR check on our rental loan page.
Why investors use DSCR loans
A conventional mortgage looks at your personal income and debts. That works for a first rental or two, then gets harder: self-employment income, write-offs on your tax returns and a growing list of mortgages all count against you. A DSCR loan sidesteps that by looking at the deal instead.
- No income documents. No tax returns, pay stubs or W-2s.
- Close in your LLC. Keep the property in your business.
- No cap on the number of rentals. Each property qualifies on its own rent.
- Built for investors. Purchase, rate-and-term refinance or cash-out.
What a DSCR loan looks like with us
HomeShield Rental loans start at rates from 5.75% for qualified borrowers, with up to 80% loan-to-value on purchases and refinances and up to 75% on cash-out. FICO options start at 640. You can choose a 30- or 40-year fixed rate, 5/6, 7/6 or 10/6 ARMs, or interest-only payments.
They aren't only for single-family homes. Select programs cover 2–4 units, 5–10 units, mixed-use, non-warrantable condos, condotels, rural properties, short-term rentals and portfolio loans that put several rentals on one loan.
See what your rental qualifies for
Send us the property and the rent. We'll come back with options, usually within one business day.
Who a DSCR loan fits best
- Self-employed investors whose tax returns don't show their real income.
- Investors growing past a handful of rentals.
- BRRRR investors refinancing out of a rehab loan (see BRRRR refinance seasoning).
- Airbnb and VRBO owners (see Airbnb loans using AirDNA income).
DSCR loans are business-purpose loans for investment property only. They can't be used for a home you live in.
Frequently asked questions
What is a good DSCR for a rental loan?
A DSCR of 1.25 or higher usually gets the best pricing and leverage. Many programs accept 1.00, and some of our programs have no minimum DSCR at all, with adjusted terms.
Do DSCR loans require tax returns?
No. A DSCR loan qualifies on the property's rent compared to its payment. We still look at credit, the property and your reserves, but not your personal income.
Can I get a DSCR loan on a vacant property?
Yes. If the property isn't leased yet, the appraiser estimates market rent, and that figure is used to calculate the DSCR.