DSCR loan FAQ

A DSCR loan is a business-purpose mortgage on a non-owner-occupied rental property that qualifies mainly on the property's rent compared to its monthly payment, rather than on your personal income or tax returns.

Divide the monthly rent by the full monthly payment, called PITIA: principal, interest, taxes, insurance and HOA dues. Example: $2,400 of rent over a $1,945 payment is a DSCR of 1.23.

There is no universal minimum. Many wholesale lenders are comfortable at 1.00 or higher, options usually improve around 1.20 to 1.25, and some programs consider ratios below 1.00 with stronger credit or reserves.

Yes. Many DSCR lenders allow closing in an LLC. Expect to provide the articles, operating agreement and EIN letter, and to sign a personal guarantee in most cases.

Often, yes. Some lenders count twelve months of booking history or a short-term rental market report, usually with a haircut. Others only use long-term rent.

Usually not. Most DSCR programs do not verify personal income. Lenders still review credit, assets for down payment and reserves, the appraisal and the property.

No. DSCR loans arranged through this site are business-purpose loans for non-owner-occupied investment property only, not for personal, family or household use.

Commonly single-family rentals, townhomes, warrantable condos, two-to-four unit properties, small apartment buildings up to about ten units, and short-term rentals with some lenders. Some mixed-use properties may fit.

Yes. On a purchase or a vacant property, lenders typically use the appraiser's market rent estimate. Many lenders do not require prior landlord experience either, though some programs do.

Yes. A DSCR cash-out refinance replaces your current loan with a larger one, and the new payment must be covered by the rent at a level the lender accepts. Seasoning rules vary.

Many wholesale lenders will work with first-time investors, sometimes with slightly different requirements. The loan still has to be for a non-owner-occupied investment property.

It depends on the lender. Many use the lower of the signed lease and the appraiser's market rent; some will use a higher lease with documented payment history.

DSCR pricing depends on credit, the ratio, loan size, property type, prepayment structure and current market conditions. A posted number would mislead most readers, so I quote real pricing after reviewing your scenario.

No. DSCR Desk is a Loan Daddy LLC brand, and Loan Daddy LLC is a mortgage broker, not a lender. I arrange and shop financing from wholesale lenders who make the final credit decision.