Qualify on the property's rent, not your tax returns
A DSCR (debt service coverage ratio) loan is a business-purpose loan for investment property. Instead of digging through your personal income and tax returns, the lender looks mainly at whether the property's rent covers its monthly housing payment. That makes it a common fit for:
- ✓Investors whose tax returns show heavy write-offs
- ✓Self-employed buyers and business owners
- ✓Investors adding a 3rd, 5th or 10th door
- ✓Buyers purchasing in an LLC
- ✓Short-term and long-term rental owners (program rules vary)
DSCR loans are for investment properties only, never a home you'll live in. They're available for properties in most states; ask us about yours.
What is DSCR?
DSCR = monthly rent ÷ monthly housing payment (principal, interest, property taxes, insurance and any HOA dues, often called PITIA).
- ✓DSCR above 1.00 means the rent more than covers the payment.
- ✓DSCR of 1.00 means the rent just covers it.
- ✓Below 1.00 means the property runs short each month. Some programs still allow this; others don't.
Each lender sets its own minimum, and the ratio is only one part of approval. Credit, reserves, down payment and the property itself all matter.
Free DSCR calculator
Enter the rent and the property's monthly housing costs to estimate coverage.
From your lender quote or any mortgage calculator
Enter your monthly rent and monthly principal + interest to see the estimate.
This is an estimate, not a loan offer or approval.
Start my DSCR loanWhat you'll typically need
- ✓The purchase contract or property address
- ✓A lease or a market rent estimate (the appraiser usually confirms rent)
- ✓Bank statements showing your down payment and reserves
- ✓Entity documents if you're buying in an LLC
No tax returns or W-2s are usually needed for the income side. We'll tell you exactly what applies to your deal.
FAQ
Can I use a DSCR loan for my first rental?
Many programs allow first-time investors. Requirements vary, so ask.
Can I close in an LLC?
Usually yes.
Can I refinance a rental I already own?
Yes, DSCR loans can be used for rate-and-term and cash-out refinances on investment property, subject to program rules.
Do I have to live in Idaho?
No. Investment-property loans are available in most states. Owner-occupied home loans are Idaho properties only.
Is this a commitment to lend?
No. The calculator is a rough estimate to help you screen deals.
Nathan Jensen, NMLS #1692830 · Jensen Lending Team, Powered by Fulcrum Home Loans · Company NMLS #1926444 · Equal Housing Opportunity · NMLS Consumer Access
DSCR loans are business-purpose loans for non-owner-occupied investment property only. Program availability, terms and requirements vary by state and property and are subject to change. Credit approval is based upon borrower meeting all underwriting requirements for a qualified borrower. Terms and conditions are subject to change without notice. This is not a commitment to lend. Calculator results are estimates for educational purposes only and are not a loan offer or approval.