A DSCR loan lets you qualify for rental financing on the property's income instead of your personal income. No tax returns, no W-2s, no pay stubs—if the rent covers the payment, the deal works. That's why it's the default tool for serious portfolio builders.
The ratio, in one line
DSCR = monthly rent ÷ monthly payment, where the payment includes principal, interest, taxes, insurance, and any HOA. If a home rents for $2,000 and the all-in payment is $1,600, your DSCR is 1.25.
A ratio of 1.0 means the property exactly breaks even. Most programs look for 1.0–1.25 to qualify; above that, your pricing improves. Below 1.0, the deal can still fund—just at adjusted leverage.
What drives your terms
Three levers move your offer: the DSCR itself, your credit score (620+ to qualify, 660+ for best pricing), and the property type. A clean 1.25 ratio on a single-family rental with a 680 score gets maximum leverage; thinner files trade leverage for approval.
Down payment typically runs 20–25%, and cash-out refinances reach roughly 75–80% LTV—enough to recycle equity into your next acquisition.
How to structure it
Match the rate structure to your hold. A 30-year fixed is set-and-forget cash flow; an ARM fits a shorter horizon; interest-only maximizes early cash flow when you're stabilizing or planning a near-term refinance.
Title in your LLC from day one—it's standard for DSCR and keeps your portfolio clean. When you're ready, send us the address and rent and we'll tell you exactly where it lands.
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