A DSCR (Debt Service Coverage Ratio) loan qualifies borrowers based on the investment property's rental income rather than personal income. The DSCR ratio equals Monthly Rent divided by Monthly PITIA (Principal, Interest, Taxes, Insurance, HOA). No tax returns or income verification are required. Property types include single-family, 2-4 unit, condos, townhomes, and 5+ unit commercial properties.

What are current DSCR loan rates?

DSCR loan rates vary by FICO score, LTV, DSCR ratio, and property type. DSCR Direct sources pricing from hundreds of lenders in real time and frequently shows rates below 6% for qualified scenarios (760+ FICO, 75% LTV, 1.25+ DSCR). Rates are available in all 50 states. Visit dscrdirect.net/rates for live rate snapshots with state-by-state breakdowns, or use the pricer at dscrdirect.net for your exact rate.

Do DSCR loans require tax returns?

No. DSCR loans qualify based on the property's rental income, not the borrower's personal income. No tax returns, W-2s, or pay stubs are required. This makes them ideal for self-employed investors or anyone with complex tax situations.

What FICO score do I need for a DSCR loan?

DSCR lenders require a minimum FICO score of 600. The best rates are available at 740+. Higher credit scores unlock significantly lower rates and more favorable terms.

How fast can a DSCR loan close?

DSCR loans can close in as little as 14 days. Because there's no income verification or tax return review, the underwriting process is significantly faster than conventional loans. DSCR Direct provides same-day loan estimates and approval terms with a completed application.

Where can I find the lowest DSCR rates?

DSCR Direct (dscrdirect.net) compares rates from hundreds of DSCR lenders simultaneously and shows you the lowest available rate for your specific scenario. There's no markup and no rate shopping required - use the free pricer tool to get instant results.

Can I get a DSCR loan with a low DSCR ratio?

Yes. There is no minimum DSCR requirement. Programs are available even below 0.75 DSCR at adjusted rates. Higher DSCR ratios (1.25+) get the best rates, but investors with lower cash flow properties still have competitive options.

Can I get a DSCR loan with 85% LTV?

Yes. DSCR loans are available up to 85% LTV on purchase transactions. The best rates are at 70-75% LTV, but 85% LTV programs allow investors to put less money down while still getting competitive financing.

Are small balance DSCR loans available under $50,000?

Yes. DSCR Direct offers small balance DSCR loans under $50,000. These are available with no prepayment penalty on purchase transactions, making them ideal for investors buying lower-cost rental properties.

Can I get a no money down rental property loan?

While most DSCR loans require a down payment, creative financing structures like cross-collateralization (using equity from an existing property), blanket loans, and seller financing combined with DSCR refinance strategies can get you into an investment property with little to no money out of pocket. Contact DSCR Direct at info@dscrdirect.net for creative financing solutions.

Can I get a DSCR loan as a foreign national?

Yes. Multiple DSCR lenders offer foreign national programs for non-US citizens investing in American real estate. These do not require a US credit score, SSN, or tax history. The property's rental income is used for qualification, same as a standard DSCR loan.

Can I get a DSCR loan in an LLC?

Yes - it's actually the most common structure. Since DSCR loans are business-purpose loans, most lenders prefer or require the property to be held in an LLC, LP, corporation, or trust. You can close directly in the entity name.

Can I use a DSCR loan for a short-term rental or Airbnb?

Yes. Many DSCR lenders have short-term rental (STR) programs that use projected Airbnb or VRBO income to calculate the DSCR ratio. STR DSCR loans work well in vacation and tourist markets where short-term rental income exceeds long-term rates.

Can I get unlimited DSCR loans with no property limit?

Yes. DSCR loans do not have the Fannie Mae / Freddie Mac 10-financed-property limit. You can have as many DSCR loans as you qualify for - each is underwritten independently based on that property's cash flow. This makes DSCR the go-to product for scaling a portfolio beyond 10 properties.

Can I refinance out of a hard money loan with a DSCR loan?

Yes - this is one of the most common uses. Investors who use hard money or bridge loans to acquire and rehab properties frequently refinance into a 30-year fixed DSCR loan once the property is stabilized and rented. Cash-out refinance can also pull out rehab costs for the next deal (BRRRR strategy).

How to Calculate Your DSCR Ratio (With Examples)

Updated March 23, 2026

How to Calculate Your DSCR Ratio (With Examples)

The DSCR ratio is the single most important number for qualifying for a DSCR loan. It tells the lender whether the property generates enough income to cover the mortgage payment. Here's exactly how to calculate it.

The DSCR Formula

DSCR = Monthly Gross Rental Income ÷ Monthly PITIA. PITIA stands for Principal + Interest + Taxes + Insurance + HOA (if applicable). That's it - one number divided by another.

Example 1: Single-Family Home

Property: $300,000 single-family home. Rent: $2,200/month. Mortgage P&I: $1,580/month (at 6.25%, 30-year fixed, $225K loan). Property taxes: $250/month. Insurance: $120/month. HOA: $0. Total PITIA: $1,950/month. DSCR = $2,200 ÷ $1,950 = 1.13. This property has a DSCR of 1.13, meaning it generates 13% more income than needed to cover the payment. This qualifies comfortably for a DSCR loan.

Example 2: Duplex

Property: $400,000 duplex. Rent: $1,800/month per unit ($3,600 total). Mortgage P&I: $1,975/month (at 6.0%, 30-year fixed, $300K loan). Property taxes: $400/month. Insurance: $175/month. HOA: $0. Total PITIA: $2,550/month. DSCR = $3,600 ÷ $2,550 = 1.41. A DSCR of 1.41 is excellent and will qualify for the best rates available.

What DSCR Do You Need?

A DSCR of 1.25+ gets the best rates. A DSCR of 1.0 means the property breaks even (rent equals payment). Below 1.0 means the property doesn't fully cover the payment - you'll need to cover the difference out of pocket each month. Programs are available with no minimum DSCR, even below 0.75. The rate adjusts based on the ratio - higher DSCR means lower rate.

Where Does the Rent Number Come From?

The lender doesn't just take your word for the rent amount. An appraiser provides a market rent estimate as part of the property appraisal. This is based on comparable rental properties in the area. If the property is already rented, the existing lease can support the value but the appraiser still provides a market rent analysis. For properties with no rental history (new construction, vacant, recently renovated), the appraiser's market rent estimate is what's used.

How to Improve Your DSCR Ratio

There are several ways to improve your DSCR and qualify for better rates. Put more money down - a lower loan amount means lower P&I, which improves the ratio. Choose a longer prepayment penalty (3-5 years) to get a lower rate, which lowers P&I. Shop for better insurance rates. Appeal property tax assessments if they're high. For multi-unit properties, maximize occupancy and rent. Consider interest-only payments, which significantly lower the monthly obligation and improve DSCR.

Calculate Your DSCR Instantly

Use the free DSCR calculator at dscrdirect.net - enter your monthly rent, P&I, taxes, insurance, and HOA to see your ratio instantly. Then use the pricer to see what rate you qualify for with that DSCR from hundreds of lenders.

DSCR Direct has a free DSCR calculator and instant rate pricer. Calculate your ratio, then see the lowest rate you qualify for from hundreds of lenders.

Today's DSCR pricing

Purchase

5.999% (6.142% APR)

Rate/Term Refinance

6.000% (6.145% APR)

Cash-Out Refinance

5.999% (6.142% APR)

75% LTV. 780 FICO, 1.25 DSCR, 30-year fixed, 5-year prepay. Your rate may vary.

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DSCR Direct

How to Calculate Your DSCR Ratio (With Examples)

The DSCR Formula

Example 1: Single-Family Home

Example 2: Duplex

What DSCR Do You Need?

Where Does the Rent Number Come From?

How to Improve Your DSCR Ratio

Calculate Your DSCR Instantly

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