DSCR Loans

DSCR (Debt Service Coverage Ratio) loans are specialty investment property loans that qualify based on the property's rental income rather than the borrower's personal income. The DSCR is calculated by dividing the property's monthly rental income by its monthly debt obligations. These loans are designed for real estate investors building or expanding a rental portfolio — no tax returns, no W-2s, no employment verification required. Contact Q Home Loans to discuss your investment property goals.

Program Benefits

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Scale Your Portfolio

DSCR loans don't count against your personal DTI, making it easier to acquire multiple investment properties.

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No Tax Return Hassle

Self-employed investors with write-offs that reduce taxable income can qualify without showing personal income.

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Short-Term Rental Eligible

Airbnb and VRBO income can be used to qualify — we use market rent data or actual rental history.

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Business Entity Vesting

Hold the property in an LLC or other entity for liability protection and estate planning.

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No Employment Verification

Retired investors, business owners, and high-net-worth individuals qualify without employment documentation.

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Fast Underwriting

Without tax return analysis, DSCR loans often close faster than conventional investment property loans.

Requirements

Basic Qualifications

  • ✓Minimum 680 credit score (720+ for best rates)
  • ✓DSCR ratio of 1.0 or higher (rental income ≥ monthly PITI)
  • ✓Down payment of 20%–25% typically required
  • ✓Property must be non-owner occupied investment property
  • ✓Appraisal with rent schedule (Form 1007) required
  • ✓Reserves of 6 months PITI typically required

Required Documents

  • ✓Government-issued photo ID
  • ✓Lease agreement or rental history (if existing rental)
  • ✓Last 2 months bank statements (for down payment verification)
  • ✓Property appraisal with rent schedule
  • ✓LLC operating agreement (if vesting in entity)
  • ✓Property insurance quote

Frequently Asked Questions

Get answers to common questions about dscr loans.

What does DSCR stand for?

DSCR stands for Debt Service Coverage Ratio. It measures whether a property's rental income covers the mortgage payment. A DSCR of 1.0 means income equals the payment; 1.25 means income is 25% higher than the payment.

What DSCR ratio do I need to qualify?

Most DSCR lenders require a minimum ratio of 1.0 (break-even). Some programs allow ratios below 1.0 with a larger down payment or higher credit score.

Can I use projected rental income for a new purchase?

Yes. For new purchases, lenders use an appraisal with a rent schedule (Form 1007) to estimate market rent. You don't need an existing tenant.

Can I hold a DSCR loan in my LLC?

Yes. DSCR loans allow vesting in LLCs and other business entities, which is a significant advantage for investors seeking liability protection.

How is DSCR different from a conventional investment property loan?

Conventional investment loans require full income documentation (W-2s, tax returns) and count toward your personal DTI. DSCR loans qualify based solely on the property's income — no personal income required.

Ready to Get Started?

Q Home Loans specializes in dscr loans for homebuyers in Washington, Idaho, and the Pacific Northwest.

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