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 term sheets 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).

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5-Unit DSCR Loan vs Commercial Multifamily Loan

Once a property has 5 or more units, conventional Fannie/Freddie financing is no longer available. Two paths exist: a 5-8 unit DSCR loan with residential underwriting, or a commercial multifamily loan with full commercial DSCR analysis. The cutoff is usually around $1.5–2M loan size.

5-Unit DSCR Loan

Residential DSCR underwriting on 5-8 unit small multifamily.

Best for: Small multifamily (5-8 units) at loan amounts $250K–$2M.

Pros

+Simpler underwriting than commercial
+No KPI/financial covenants
+Closes in 30 days
+30-year fixed available

Cons

−Capped at $2–3M typically

Commercial Multifamily Loan

Full commercial underwriting (CMBS, agency, life-co).

Best for: Multifamily $2M+ with experienced sponsors.

Pros

+Higher loan amounts
+Lower rate at scale (especially Fannie/Freddie agency)
+Non-recourse common above $2M

Cons

−Yield maintenance / defeasance prepay
−Loan covenants and KPIs
−60–90 day close
−Higher transaction costs

Field	5-Unit DSCR Loan	Commercial Multifamily Loan
Min FICO	680+	Sponsor net worth + liquidity tests
LTV (purchase)	Up to 75–80%	Up to 75–80%
LTV (cash-out)	Up to 70–75%	Up to 70%
Income docs	DSCR (rent roll)	Full commercial DCR + IRR analysis
Term	30-year fixed, ARM	5/7/10-year balloon, IO
Time to close	30 days	60–90 days

Which one should you choose?

5-Unit DSCR Loan: choose 5-unit DSCR for small multifamily up to $2M, or when speed matters.
Commercial Multifamily Loan: choose commercial multifamily for properties $2M+, especially when non-recourse pricing or 30-year-amortization with 10-year IO is meaningful.
For a $1.5–2M property, run both — DSCR usually wins on simplicity, commercial usually wins on rate.

Frequently asked questions

Is a 5-unit DSCR loan recourse?

Generally yes (full recourse). Non-recourse on small multifamily is rare and priced higher.

What's the prepayment structure?

5-unit DSCR: typical 1-5 year prepay with declining buyout. Commercial: yield maintenance or defeasance for 7-10 years.

Not sure which fits your scenario?

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Mixed-Use & 2-8 Unit

DSCR financing for mixed-use buildings (residential + commercial) and small multifamily 2-8 unit. No personal income docs.

Blanket Loan

Blanket loans cover multiple investment properties under a single mortgage. DSCR underwriting at the portfolio level, release clauses, and one closing.

Blanket vs Cross-Collateral

Blanket loan or cross-collateral loan for multi-property financing? Compare structure, release clauses, and use cases.