DSCR Loans
Debt-Service Coverage Ratio (DSCR) loans are investment-focused mortgage products that allow real estate investors to qualify based on a property’s cash flow rather than their personal income. Instead of traditional tax returns, pay stubs, or W-2s, lenders primarily look at whether the rental income of the property can cover the monthly payment (principal, interest, taxes, insurance, and HOA if applicable).
This makes DSCR loans ideal for investors who want to scale their portfolios quickly without the limitations of conventional underwriting.
Because DSCR financing is based largely on the property’s ability to generate revenue, borrowers often enjoy more flexibility, faster approvals, and the opportunity to expand into multiple properties with fewer income-related hurdles.
These loans are especially popular among self-employed investors, short-term rental hosts (Airbnb/VRBO), and those building long-term rental portfolios. With competitive terms and minimal documentation, DSCR loans have become one of the leading tools for real estate investors nationwide.
Some Key DSCR Loan Characteristics
Qualification Based on Property Cash Flow — Approval is driven by rental income vs. monthly payment, not W-2s or tax returns. Unlike many of our competitors, we do small loans and large loans!
Minimal Documentation — No personal DTI calculations, no tax returns, and often no employment verification.
Flexible DSCR Requirements — Many of our programs allow DSCR as low as 1.0, some even under 1.0 with compensating factors. We even have specialized programs that allow for no rents using the appraiser's opinion of value. We are 'problem solvers' and have developed programs to address most issues investors run into.
Ideal for Investment Properties Only — DSCR loans cannot be used for primary residences or second homes.
Short-Term & Long-Term Rental Friendly — Works for Airbnb, VRBO, mid-term rentals, and long-term leases.
Higher LTV Options Available — Commonly up to 80–85% LTV, depending on DSCR ratio and credit.
Property-Driven Underwriting — The focus is on property type, condition, rental demand, and DSCR strength.
Interest-Only Options — Some programs offer IO periods to increase cash flow and lower initial payments.
Prepayment Penalties Common — Typically 3–5 years, especially on long-term fixed options.
Great for Portfolio Expansion — Allows investors to acquire multiple properties without income cap restrictions.
Higher LTV Options Available — Commonly up to 80–85% LTV, depending on DSCR ratio and credit.
Property-Driven Underwriting — The focus is on property type, condition, rental demand, and DSCR strength.
Interest-Only Options — Some programs offer IO periods to increase cash flow and lower initial payments.
Prepayment Penalties Common — Typically 3–5 years, especially on long-term fixed options.
Great for Portfolio Expansion — Allows investors to acquire multiple properties without income cap restrictions.
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Copyright ©2021 | The Harry Krause Team
Licensed to Do Business in GA
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | AXEN Mortgage
Corporate | NMLS ID NMLS# 1660690
Corporate Address : 5559 S Sossaman Rd, Bldg 1 Ste 101 Mesa, AZ 85212
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Copyright ©2021 The Harry Krause Team | NMLS# 404518
Licensed to do business in
This is not an offer to enter into an agreement. This is not a commitment to make a loan. Not all customers will qualify. Information, rates and programs are subject to change without prior notice. All products are subject to credit and property approval. All approvals are subject to underwriting guidelines. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit standards, and property limits. NEXA Mortgage, LLC is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency.
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