Quick Answer
A DSCR loan works by qualifying you based on the property's rental income instead of your personal income. The lender calculates if the monthly rent covers the mortgage payment (PITI) plus HOA fees. A DSCR ratio of 1.0 or higher (rent ≥ debt) typically qualifies. No tax returns, W-2s, or employment verification required.
How Does a DSCR Loan Work?
The DSCR Loan Process: Step-by-Step
Property Income Assessment
The lender determines the property's monthly rental income using a market rent analysis, existing lease, or projected Airbnb income. No need to verify YOUR income.
Calculate Monthly Debt Payment
Add up all monthly costs: mortgage payment (principal, interest, taxes, insurance) + HOA fees + any other property-related debt.
DSCR Calculation
Divide monthly rent by monthly debt payment. Example: $3,000 rent ÷ $2,500 debt = 1.20 DSCR (property cash flows 20% above break-even).
Credit & Down Payment Review
Lender reviews credit score (620+ required) and down payment (20-25%). No income documentation needed.
Approval & Closing
Get pre-approved in 24-48 hours, close in 7-14 days. Much faster than traditional loans due to no income verification.
DSCR Calculation Formula
Real Example:
✓ APPROVED
DSCR of 1.22 means the property generates 22% more income than debt payments. This qualifies for most DSCR loan programs.
What Makes DSCR Loans Different?
✗ Traditional Mortgage
- ✗ Requires 2 years tax returns
- ✗ Needs W-2s and pay stubs
- ✗ Employment verification required
- ✗ Debt-to-income ratio calculated
- ✗ 30-45 day closing process
- ✗ Limited to 10 financed properties
✓ DSCR Loan
- ✓ No tax returns needed
- ✓ No W-2s or pay stubs
- ✓ No employment verification
- ✓ Only property income matters
- ✓ 7-14 day closing possible
- ✓ Unlimited financed properties
Calculate Your DSCR Now
Use our free DSCR calculator to see if you qualify. Get instant results and pre-approval in 24-48 hours.