A DSCR loan (Debt Service Coverage Ratio loan) is financing based on a property’s income, not your personal earnings. Lenders check if the property’s cash flow (NOI) can cover the loan payments by calculating the DSCR ratio. A ratio of 1.0 or higher means it’s a good fit (We have loan options for ratios less than 1.0). Perfect for investors relying on rental income.
A DSCR loan is a game-changer for business purpose investments, offering flexibility and efficiency for real estate investors seeking to expand their portfolio. With a DSCR loan, you can qualify based on the income generated by your investment property, rather than relying on your personal income or employment status. Let’s explore the benefits and requirements of this unique financing solution.
DSCR loans emphasize the performance of the investment property, allowing borrowers to avoid complex personal income documentation. This makes the process quicker and less invasive.
These loans are ideal for self-employed individuals, seasoned investors, or those with non-traditional income sources. Personal income isn’t the focus—it’s all about the property’s cash flow.
Whether you’re buying your first rental property or expanding an existing portfolio, DSCR loans provide scalable solutions tailored to investment growth.
DSCR loans often come with attractive terms, including competitive interest rates and flexible down payment options, making them an excellent choice for long-term real estate investments.
From single-family homes to multifamily properties and commercial real estate, DSCR loans can be used for a wide range of property types.
The property’s DSCR must meet or exceed the lender’s minimum requirement, often around 1.0 or higher. A DSCR of 1.25, for example, indicates that the property generates 25% more income than needed to cover debt service.
Most lenders require a down payment of 20% to 25%, but at Pro Investor Capital we have loan options with down payments starting at 15%, depending on the property type and borrower’s profile.
While DSCR loans are property-focused, a minimum credit score (usually around 620-680) is typically required to demonstrate financial responsibility.
A professional appraisal is necessary to confirm the property’s value and potential income, ensuring it aligns with the lender’s standards.
Lenders often require reserves—typically six to twelve months of mortgage payments—to demonstrate financial stability. However, in some cases, well-qualified borrowers may be approved with little to no reserve requirement.
For existing properties, you’ll need to provide rental income documentation, such as leases or rental income history. For new purchases, projected rental income estimates may be used.
Drivers License, Passport, etc.
To show enough funds for down payment, closing costs and reserves.
For primary residence (if applicable)
Articles of Incorporation, Operating Agreement, Tax Identification Number, Certificate of Good Standing
A recent quote for the subject property.
A DSCR loan can be an excellent fit for investors who:
Ready to leverage the power of a DSCR loan for your business purpose investments? Contact us today to learn more about how this innovative financing option can help you achieve your real estate goals. Let’s build your future, one property at a time!
A DSCR loan (Debt Service Coverage Ratio loan) is financing based on a property’s income, not your personal earnings. Lenders check if the property’s cash flow (NOI) can cover the loan payments by calculating the DSCR ratio. A ratio of 1.0 or higher means it’s a good fit. Perfect for investors relying on rental income
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