DSCR: The Mortgage for Real Estate Investors
In this guide, we’ll explain how a Debt Service Coverage Ratio (DSCR) loan works, how to qualify for one, and how it compares to other investment property loan options so you can scale your real estate portfolio faster and with less red tape.
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What is a DSCR Loan?
- A mortgage that qualifies based on rental cash flow, not pay stubs or other traditional income documents
- No W-2s, no pay stubs, and no tax returns required
- Options for single-family homes, condos, and 1–4 unit investment properties
- Competitive interest rates and terms for qualifying properties
Quick Answer
A DSCR loan lets you finance rental properties based on their income potential, not yours. These are ideal for investors seeking to grow their wealth without traditional income verification requirements.
Why Consider a DSCR Loan?
Here’s why real estate investors choose DSCR loans:
Qualify Using Rental Income Only
Your debt-to-income ratio doesn’t apply. Instead, lenders look at the property’s debt service coverage ratio, which is a simple calculation that divides rental income by housing expenses.
Faster Closings with Less Paperwork
Because underwriters are evaluating the property rather than your personal finances, you can get to the closing table faster with fewer hoops to jump through.
Skip the Tax Returns
DSCR loans don’t rely on tax documents or W-2s, so an aggressive tax strategy won’t hurt your ability to qualify.
Scale Your Real Estate Portfolio
DSCR loans are designed for real estate investors who want to grow their investment portfolio.
Pro Tip
The higher the DSCR (rental income divided by monthly housing costs), the better your loan terms will be. Most lenders look for a DSCR above 1.00.
Who Qualifies for a DSCR in 2025?
Property Type
Non-owner occupied 1-4 unit residential
Credit Score
620 minimum (680+ for best rates)
Down Payment
20-25% (varies by borrower and property)
Loan Type
30-year fixed, ARM, or interest-only options
DSCR
At least 1.00 (rental income ÷ monthly housing costs)
Compare DSCR Loans to Bank Statement & Conventional Loans
DSCR
Bank Statement
Conventional Loan
How to Apply for a DSCR Loan
Pre-Qualify Your Property
We’ll help you run the numbers: monthly rent, property expenses, and how they calculate into your DSCR.
Choose a Loan Program
Fixed or adjustable? Interest-only or amortizing? We’ll show you options that fit your investment strategy.
Submit Basic Docs
No income docs required—but you’ll need your lease agreement, appraisal, and property info.
Close & Start Cash Flowing
We’ll handle the underwriting and keep your closing timeline on track so you can start earning fast.
Frequently Asked Questions
Wondering if a DSCR loan makes sense to you? Get clear, expert answers to the most common questions—cost, timing, benefits, and more!
Here's Why UMortgage is Your Best Choice
Relationships, Not Transactions
We’re here for more than just your mortgage. We’ll stick with you beyond closing to help you gain financial freedom through homeownership.
Local & Nationwide Expertise
With licensed loan officers across the country and deep knowledge of your local market, we’ll help you buy with confidence anywhere you call home.
Fast, Transparent Closings
We communicate with you every step of the homebuying or refinance process so you can close quickly without any hidden fees or surprises.