DSCR · Investor program
DSCR loans.
DSCR loans are for investment properties where the property's rental income is used to qualify the loan instead of traditional personal income. Pricing, down payment, reserves, rent coverage, property type, and prepayment terms all matter.
The property qualifies, not the borrower.
DSCR is investment-property-only. It is not a tool for owner-occupied purchases. The underwrite uses the property's rental income — actual lease or market rent appraisal — measured against PITI.
The trade is higher pricing than primary-residence conventional, larger down payment, possible prepayment penalty, and lender overlays that vary widely. Final terms remain subject to verification, underwriting approval, and program guidelines. Nothing on this page is a quote, approval, or commitment to lend.
Six things to understand first.
Each item below is general framing. Specific DSCR ratio thresholds, down-payment minimums, reserve requirements, and prepayment-penalty structures vary by lender — final terms remain subject to verification, underwriting approval, and program guidelines.
What DSCR means
Debt Service Coverage Ratio. The lender qualifies the loan against the property's rental income rather than the borrower's W-2 / Schedule C / K-1 income. DSCR loans are for investment properties only — not for owner-occupied homes.
When DSCR makes sense
Investors who don't want to (or can't easily) document personal income at the level conventional investment underwriting wants. Rental property qualifies on its own cash flow. Useful for portfolio builders and self-employed investors with complex tax returns.
Rent coverage + property cash flow
The property's monthly rent compared against PITI determines the ratio. Each lender has its own ratio thresholds and underwriting standards. The ratio drives pricing tier, down-payment requirement, and approval at most DSCR shops.
Down payment, reserves, investor pricing
DSCR loans typically require larger down payments and reserves than owner-occupied conventional. Pricing is investor-pricing — higher than primary-residence pricing — because the file is treated as portfolio risk.
DSCR vs conventional investment
Conventional investment loans use personal income, tax returns, and DTI. DSCR uses the property. Same file can price very differently depending which path the lender uses — and DSCR isn't always cheaper. Compare both honestly before committing.
Risks: rates, prepayment, overlays
DSCR pricing is often higher than conventional. Some DSCR loans carry prepayment penalties (1–5 years). Investor overlays vary widely. Read the structure carefully — and model both paths before applying.
Run the ratio, then compare paths.
Verify investment intent
DSCR is investment-only — never owner-occupied. We confirm the use, the property, and the borrower's investor framing before any DSCR conversation begins.
Run rent coverage
Actual or market rent vs PITI at the lender's ratio threshold. The ratio drives pricing tier, down payment, and whether the file makes sense.
Compare DSCR vs conventional investment
Same file, both paths. Sometimes DSCR wins on doc-light underwriting; sometimes conventional investment wins on pricing. The right answer depends on income shape, reserves, and the property.
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Estimates only. Not a Loan Estimate, not an approval, not a commitment to lend, not a rate lock. Final terms depend on verified credit, income, assets, property, loan program, lock date, lender conditions, and actual third-party fees. The Mortgage Expert · NMLS 2412313 · Equal Housing Opportunity.