DSCR
DSCR stands for debt service coverage ratio, and it is the single number this kind of loan lives on. Rather than measuring what you earn, the lender measures whether the property's rent covers the debt it is carrying.
Get a free loan quote Call (833) 354-7666Rental income is divided by the property's total debt obligation — the loan payment plus taxes, insurance, and any association dues. A ratio of 1.0 means the rent exactly covers those costs. Above 1.0 the property carries itself with room to spare; below 1.0 it does not cover its own obligations and the lender is relying on you to make up the difference every month.
Rent. Either the lease in place, or a market rent opinion where the property is not yet let.
Principal, interest, taxes, insurance and association dues. Not just the loan payment, which is where borrowers' own maths usually differs from the lender's.
Underwriting will replace your optimistic tax and insurance figures with real ones, and the ratio will move. Better to model it honestly first.
Different lenders require different minimums and price different tiers. We will not tell you the number you need to hit, because it is theirs, not ours.
Conventional lending examines your personal income, your debt-to-income ratio and how many financed properties you already hold. Investors with several rentals usually collide with one of those three long before they run out of good deals. DSCR sidesteps all of them by asking about the asset instead.
Self-employed investors, and anyone whose tax return understates their real cash flow, generally fare better here.
The usual reason investors move to this product in the first place.
Fewer personal financial documents, more property documents.
Holding title in an LLC is expected here rather than a complication.
Almost every decline on this product traces back to coverage that is too thin or income that cannot be evidenced. Both are visible before you apply.
Actual rent on a real lease is stronger evidence than a market rent estimate.
More volatile, so it is examined harder. Say up front if that is what this is.
A property that needs work before it can be let is not yet a DSCR deal; it is a bridge or rehab deal first.
Cash left after closing reassures a lender that one vacancy will not end the loan.
A DSCR enquiry is answerable quickly, because the calculation needs only a handful of figures — but it needs the real ones, not the ones that make the ratio look best.
No fee to submit it, and no obligation once terms come back.
We are a connector, not the lender. We place your deal with private and hard money lenders who fund this profile; they underwrite it, approve it and set the terms. We will not quote a rate, points or leverage before a lender has read the file, and we do not use the word approved. If the deal does not fit private lending, we would rather tell you on the first call — see how the process works for the short version.