For real estate investors

DSCR financing for rental properties

Numbers people, this one is for you. Whether you are adding a Detroit duplex or a rental up north, DSCR financing is worth a look. DSCR stands for debt service coverage ratio. These loans generally focus on how a property's expected rental income compares to its housing expenses, instead of leaning mainly on your personal income documentation.

Run an investment scenario

Long term rental, short term rental or a portfolio play. Let's look at it.

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The basics

How DSCR loans generally work

Program details vary by investor and change over time, so think of this as the overview. I will walk you through current specifics for your exact scenario.

The ratio

The property's rental income is compared to its monthly housing costs, such as principal, interest, taxes, insurance and any association dues. The result helps determine eligibility.

The property

These loans are for investment properties, not your primary residence. Eligible property types and rental arrangements depend on the program.

The paperwork

Documentation tends to center on the property and your reserves. Credit, down payment and other requirements still apply and vary by scenario.

Good fit?

Investors who often ask about DSCR

  • Self employed buyers whose tax returns do not tell the whole story
  • Investors growing a rental portfolio
  • Buyers who want to keep personal and investment finances separate
  • Anyone comparing DSCR against conventional investment property financing
DSCR loans are business purpose loans for non owner occupied investment properties. Eligibility, terms and requirements vary by program and are subject to credit approval, underwriting and property review. Not available for primary residences.
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