DSCR loans: the rent covers the mortgage, your tax return doesn't matter.
When you're buying a rental, the property's own cash flow is what qualifies the loan, not your personal income. DSCR financing skips personal DTI entirely. Close in an LLC, scale a portfolio, refinance for cash-out.
Program figures verified July 2026 — details change; confirm your scenario with us.
Quick answer: what is a DSCR loan?
- Income source: The property's rental income: Covers the property's mortgage payment.
- Personal income required? No. Your tax return, paystubs, and personal DTI are not used.
- Who it's for: Real-estate investors purchasing or refinancing rental property (1–4 unit, sometimes 5–10).
- Min FICO: Typically 660+.
- Down payment: Typically 20–25%.
- Min DSCR ratio: Typically 1.00–1.20, with rate improvements at 1.25+.
What "DSCR" actually means
Debt-Service Coverage Ratio = the property's monthly rental income ÷ the property's monthly PITIA (principal + interest + taxes + insurance + association dues).
- DSCR > 1.0 means the property cash-flows.
- DSCR = 1.0 means rent exactly covers the mortgage.
- DSCR < 1.0 means the property is negative cash flow, some programs allow it at higher rates and reserves.
The investor doesn't care about your personal DTI. They care that the property covers itself.
How rental income is documented
- For a purchase: Rental income is established by an appraiser's market rent estimate (Form 1007 or 1025) or by an existing lease if the property is tenant-occupied.
- For a refinance: Existing lease + bank statements showing recent rent receipts.
- Short-term rental (Airbnb / Vrbo): Some investors will use 12-month income history from AirDNA or your STR platform; others will use long-term market rent only. See the Airbnb DSCR loan page for Sedona, Scottsdale, and Flagstaff market-specific numbers.
Worked example — Phoenix rental property
Investor buying a $400,000 SFR in Mesa, putting 25% down. Loan amount $300,000. Monthly PITIA ~$2,400. Appraiser sets market rent at $2,800.
- DSCR = $2,800 ÷ $2,400 = 1.17
- Most programs accept DSCR ≥ 1.00 and price improves at 1.20 / 1.25.
- Result: File underwrites and prices well, no personal income calculation.
What you'll need
- Property address + purchase contract (or current loan info, if refinance).
- If tenant-occupied: Lease + 2 months bank statements showing rent received.
- Two months of personal asset statements showing reserves (typically 3–6 months PITIA in liquid reserves).
- Standard mortgage docs (ID, credit pull).
- Not Required: Tax returns, paystubs, W-2s, bank statements for personal income.
FAQ
Can I do DSCR on a property I'll live in?
No. DSCR is non-owner-occupied only. For owner-occupied financing on the same kind of property, look at conventional or one of the alt-doc personal-income programs.
What if the rent doesn't cover the payment?
Some investors will go to a DSCR of 0.75 or below at adjusted rate and reserves. Below 0.75 is typically a 'no DSCR' or 'no ratio' program with even higher requirements.
Do you finance short-term-rental (Airbnb) properties?
Yes. Short-term-rental DSCR is offered by several of our investors, with the income basis varying, some use 12-month STR history, some use long-term market rent only.
Can I close in an LLC?
Yes. DSCR is one of the few programs that allow closing in the name of an LLC, partnership, or revocable trust. Many investors prefer it.
What about 5–10 unit properties?
Some DSCR programs go up to 10-unit. Above 4-unit becomes 'small-balance commercial' DSCR and prices a bit higher than 1–4 unit residential DSCR.
Cash-out refinance available?
Yes. Cash-out DSCR refinances are widely available, useful for pulling equity from a rental to buy the next one.
Is 1.25 always the minimum DSCR ratio?
No. Most 2026 programs qualify from a 1.00 ratio, and some go to 0.75 or use a "no-ratio" structure that skips the coverage test entirely, usually paired with a higher FICO floor (680+) and lower leverage (around 70% LTV). A 1.25+ ratio just prices better; it isn't the minimum bar to qualify.
Does DSCR always require 20–25% down?
That's typical, but no-ratio DSCR programs (no minimum coverage requirement) commonly ask closer to 30% down instead, plus about 12 months of reserves, trading a lower down payment for a stricter ratio test, or vice versa.
Do all lenders count Airbnb income the same way for DSCR?
No. Some use trailing-12-month platform revenue for the property; others accept only the appraiser's long-term market-rent estimate on a short-term-rental property, which can produce a meaningfully different qualifying number for the identical address. Ask which basis a specific investor uses before comparing two pre-approvals.
Want to run your own numbers? Use the DSCR ratio calculator to see where a specific property lands before you call.
Ready to see if this is the right program?
Start the application or book a 20-minute call. We'll model real numbers, not estimates.