05/19/2026
DSCR LOAN - How DSCR loans actually work
Here's exactly how they work:
A DSCR (Debt Service Coverage Ratio) loan qualifies you based on the property's rental income, not your personal income, tax returns, or W-2s. It's built for investors.
The formula is simple: Monthly Rent ÷ Monthly Mortgage Payment = DSCR
A DSCR of 1.0 means the rent exactly covers the mortgage. Most lenders want 1.0–1.25+.
Example: Rent = $2,000 / Mortgage = $1,600 → DSCR = 1.25
Typical DSCR loan requirements:
Min. credit score: 620–680 (680+ gets better rates)
Down payment: 20–25% minimum
DSCR ratio: 1.0 or higher (some lenders allow 0.75 with higher down)
Property types: SFR, 2–4 units, condos, short-term rentals, 5+ units
No income verification or employment required
Loan amounts: typically $100K–$3M+
Reserves: 3–6 months PITI required
Who it's for: Real estate investors, self-employed buyers, or anyone whose rental income qualifies, even when personal income doesn't.
Considering purchasing an investment property? Reach out to me to learn about DSCR loans and discover how I've assisted investor clients in growing their portfolios using these loans.
Titilope Adegbemle,
REALTOR
LPT Realty
Call/Text: (512) 293- 5000
[email protected]
