Rental Property Loans That Qualify on the Property, Not Your Tax Return
If you own or are buying rental property, a DSCR loan looks at what the property earns instead of what your tax return says you earn.
At a glance
- Minimum ratio
- None
- Tax returns
- Not needed
- Minimum credit
- 550
- Max LTV, purchase
- 80% of value
- Typical timeline
- 21 to 30 days
- Property limit
- None
Scope: nationwide. DSCR is business-purpose lending and we broker it across the country. Owner-occupied home loans are available in California only.Work out your ratio
The rent qualifies the loan, not your tax return
This solves a specific problem. Investors write off legitimate expenses and their tax returns show low income as a result.
Conventional loan
Reads your tax return
Conventional lenders read that return and see someone who cannot afford another loan — even when the properties are performing well and the rent is coming in every month.
DSCR loan
Reads the property's rent
- Monthly rent
- $3,000
- ÷Total monthly obligation
- $2,500
- =Coverage ratio
- 1.20
DSCR stands for Debt Service Coverage Ratio. It is a straightforward calculation: the rent the property brings in, divided by the monthly payment on the loan. The ratio tells a lender how much of the payment the rent covers. Your personal income is not part of the decision.
DSCR sidesteps that entirely.
DSCR sits under two parts of this site. It is both an investor program and a Non-QM income method, which is why it appears under both — one page, one product, two ways in.
Who this fits
You own rental property and your tax returns understate what you actually earn.
You have hit the limit on how many properties a conventional lender will finance.
You buy in an LLC or another entity, which most consumer mortgage lenders will not do.
You are building a portfolio and need a method that still works on the fifth property, not just the first.
You want to skip the paper chase assembling two years of returns, K-1s, and business financials for every purchase.
Who this does not fit
Anyone buying a home to live in. DSCR is a business-purpose loan for investment property. This is not a technicality we can work around.
A borrower whose tax returns do support the loan. If they do, a conventional investment loan usually costs less. We will tell you when that is the case — see Investor Financing.
A property with no rent and no market rent to establish. Raw land and a shell that cannot be rented have nothing to divide. Construction or hard money is the route while the property is not yet income-producing.
How we qualify the property
We start with the rent. Either the lease you already have, or the appraiser's estimate of market rent if the property is vacant. We compare that against the full monthly obligation — principal, interest, taxes, insurance, and HOA dues if there are any.
The property
Rent ÷ full monthly obligation = coverage ratio
| Coverage ratio | What the rent covers | Most lenders | Us |
|---|---|---|---|
| 0 to 0.75 | Up to 75% of the payment | Decline | Ratio Program |
| 0.75 to 0.99 | 75% to 99% of the payment | Decline | Ratio Program |
| 1.00 to 1.30 | 100% to 130% of the payment | Lend | Ratio Program |
There is no minimum ratio. What changes across the bands is leverage and terms, not whether the loan is possible. The low bands have a page of their own — No-Ratio and Low-Ratio DSCR.
Then you
We look at
- Credit
- Reserves
- Your track record with property
We do not look at
- Your personal income
- A debt-to-income ratio
What you will need
About the property
- The purchase contract, or your current mortgage statement if you are refinancing
- An appraisal with a rent schedule
- Current leases, if the property has tenants
- Insurance binder, including landlord coverage
About you
- Credit report
- Bank statements showing your down payment and reserves
- LLC documents, if you are buying in an entity
- A list of the property you already own
No tax returns. No W-2s. No pay stubs.
The honest trade-offs
It costs more, and you put more down
DSCR costs more than a conventional investment loan and asks for a larger down payment. That is the price of skipping personal income documentation.
- The most we lend against value on a purchase
- 80% of value
Check the prepayment penalty before you commit
Prepayment penalties are common on these loans and ours are structured as a 2 to 5 year prepayment period. If you are planning to sell or refinance in the next few years, this matters a great deal and we will walk through it before you commit. We would rather have that conversation up front than have you discover it at closing.
- Structured as
- 2 to 5 year prepayment period
Process and timeline
Typically 21 to 30 days, depending mainly on the appraisal. That is a typical range, not a promise, and nothing is approved until a lender approves it.
Before you spend anything on an appraisal
Scenario analysis
Tell us the rent and the likely payment. We tell you which band the property lands in before you spend anything on an appraisal.
Lender analysis
The file goes to the lenders whose program fits that band, from a panel of 20+.
Application to closing
- Application
- Appraisal with rent scheduleSets most of the timing
- Underwriting
- Closing
Typical timeline21 to 30 days
DSCR calculator
Work out your ratio
Enter the rent, the loan, the rate you have been quoted elsewhere, and the monthly carrying costs. The calculator shows the arithmetic and which of the three bands the result falls into.
Your ratio
—
Fill in the rent, the loan amount, the rate and the term. The ratio updates as you type.
- Monthly rent
- —
- Principal and interest
- —
- Property tax
- —
- Insurance
- —
- HOA
- —
- Total PITIA
- —
For illustrative and educational purposes only. Results produced by this calculator perform arithmetic based solely on numbers you enter and do not reflect actual loan offers, interest rate quotes, or commitments to lend. Actual loan terms, payments, interest rates, and approval depend on complete underwriting, credit review, property valuation, and lender guidelines. Loankey.io arranges loans through third-party lenders; loans are not funded directly by Loankey.io.
Frequently Asked Questions
Nineteen questions we hear most, from what the ratio means to whether you can buy in an LLC. Can't find yours — call or send a scenario.
What does DSCR actually stand for?
Debt Service Coverage Ratio. It measures how much of the property's loan payment the property's rent covers.
How is the ratio calculated?
Monthly rent divided by the property's total monthly obligation — principal, interest, taxes, insurance, and HOA dues. Illustration only: if a property rents for $3,000 a month and the total obligation is $2,500, the ratio is 1.20. That figure is arithmetic, not an offer, and your own numbers decide your outcome.
What ratio do I need?
There is no minimum. The ratio decides which of the three programs fits and what terms come with it, not whether financing is possible at all. A higher ratio gives you more leverage and better pricing; a lower one narrows the options without closing them.
Do you look at my tax returns?
No. That is the point of the program. Your personal income does not enter the decision.
Do you calculate my debt-to-income ratio?
No. The other property you own does not count against you the way it would conventionally, which is why investors use this to keep buying.
Does my credit still matter?
Yes. Credit affects whether you qualify and what it costs, even though income does not. Ours starts at 550, and lower scores are considered on an exception basis.
Can I buy in my LLC?
Yes. Entity borrowing is normal here and it is one of the main reasons investors choose DSCR over a conventional loan.
What if the property is vacant?
We use the appraiser's market rent estimate rather than an actual lease. Terms may differ from a tenanted property, so tell us the occupancy status early.
What if the property does not cash flow?
It can still be financed. That is what the sub-1.00 programs exist for, and it is the main reason investors come to us after being declined elsewhere. Expect lower leverage and different terms than a property with a higher ratio — but the answer is not no. Tell us the rent and the likely payment at the scenario stage and we will tell you which band you are in before you spend anything on an appraisal. There is a full page on it: No-Ratio and Low-Ratio DSCR.
How much do I need to put down?
More than a conventional investment loan. The maximum we can lend against value on a purchase is 80% of value.
Do I need cash reserves after closing?
Yes — 3 months. Lenders want to see the property can survive a vacancy. Some exceptions can be made, cash-out proceeds can be used, and gift funds can be used.
Is there a prepayment penalty?
Usually. Ours is structured as a 2 to 5 year prepayment period. If you might sell or refinance within a few years, raise this before you apply — it is the single most common source of unpleasant surprises on these loans.
Can I refinance a rental I already own?
Yes, including cash-out in most cases. The property still has to be placed in one of the three ratio bands, and cash-out ceilings are lower than purchase ceilings.
Does short-term rental income count?
Yes. We use data sources such as AirDNA to establish short-term rental income.
How many properties can I finance this way?
There is no limit. We also finance portfolio loans across multiple properties.
Is DSCR available outside California?
Yes. It is business-purpose lending and we broker it nationwide, with Eric Figueroa as broker of record. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.
How is this different from hard money?
DSCR is long-term financing for a property that already performs. Hard money is short-term financing for speed or for property that is not ready yet. Different problems, different tools.
Can I use it for a house I will live in?
No. It is a business-purpose loan for investment property only, and that is not something any lender can work around.
Do you fund the loan yourselves?
No. We are a brokered business and place your file with the lender whose program fits it.
How long does it take?
Typically 21 to 30 days, depending mainly on the appraisal. We will not put a date on your file before we have seen it.
What happens next
Before DSCR
When the property needs work or the closing has to happen in weeks. Most of those loans refinance into DSCR once the property is rented.
Building the rental rather than buying it, with DSCR planned as the take-out.
You are here
DSCR Loans
DSCR is long-term financing for a property that already performs.
If the rent falls short
No-Ratio and Low-Ratio DSCRIf the rent does not fully cover the payment, this is the page that explains the three bands in detail.
After DSCR
Pulling equity out of a rental you already own to fund the next down payment.
DSCR has no property limit, so the same method works on the second, fifth and tenth purchase. Start a new scenario analysis and we will look at the portfolio option.
Send the rent, the value, and the loan you have in mind
You will get the ratio band and the realistic route before anyone spends money on an appraisal.
Nothing on this page or website constitutes an offer of credit, a rate quote, or a commitment to lend. All loans are arranged through third-party lenders and are subject to full application, credit approval, income/asset verification, property appraisal, and underwriting. Terms and availability are subject to change without notice. Loankey.io is a licensed real estate broker; loans are arranged, not made. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.