Quick Answer
A DSCR (Debt Service Coverage Ratio) loan is a no-documentation investment property loan that qualifies based on the property's rental income rather than the borrower's personal income. DSCR loans require no tax returns, W-2s, or income verification, making them ideal for self-employed investors and those with complex income situations.
What is a DSCR Loan?
DSCR Loan Definition
DSCR stands for Debt Service Coverage Ratio. A DSCR loan is a specialized mortgage product designed for real estate investors that uses the property's income-generating potential as the primary qualification criteria, rather than the borrower's personal income.
Unlike traditional mortgages that require extensive documentation of your personal finances (W-2s, tax returns, pay stubs, employment verification), DSCR loans focus entirely on whether the rental property can generate enough income to cover its mortgage payment, property taxes, insurance, and HOA fees.
How Does a DSCR Loan Work?
The DSCR loan qualification process is straightforward and revolves around one key calculation:
Monthly Debt Payment = Mortgage (PITI) + HOA fees
Example Calculation:
A DSCR of 1.19 means the property generates 19% more income than needed to cover all debt payments. Most lenders require a minimum DSCR of 1.0 to 1.25.
Key Benefits of DSCR Loans
No Tax Returns Required
Perfect for self-employed, business owners, or those with complex tax situations
No Income Verification
Personal income, W-2s, and pay stubs are not required
Fast Approval
24-48 hour pre-approvals and 7-14 day closings
Unlimited Properties
No limit on the number of financed investment properties
Cash-Out Refinance
Access up to 80% of your property value
Competitive Rates
Starting at 5.99% for qualified borrowers
Who Should Get a DSCR Loan?
DSCR loans are ideal for:
- ✓Self-employed borrowers who don't want to provide tax returns
- ✓Business owners with complex income structures
- ✓Real estate investors building rental portfolios
- ✓High-income earners who write off significant business expenses
- ✓Foreign nationals investing in U.S. real estate
- ✓Investors with multiple properties (no limit on number of financed properties)
- ✓Borrowers with credit scores as low as 620
- ✓Anyone who values privacy and wants to avoid extensive financial documentation
DSCR Loan Requirements
Credit Score
Minimum 620 (640+ for best rates)
Down Payment
20-25% (varies by credit score and property type)
DSCR Ratio
Typically 1.0 or higher (some programs accept 0.75+)
Property Type
1-4 unit residential, condos, townhomes, small commercial
Loan Amount
$75,000 to $30,000,000
Ready to Get Pre-Approved?
Capital Bridge Solutions offers DSCR loans starting at 5.99% with 24-48 hour approvals. No tax returns required.