DSCR investment loans
An investor loan focused on the rental property’s cash flow.
How it works
DSCR means debt service coverage ratio. A lender compares qualifying rent with the proposed housing payment to see how well the property supports the debt. These programs are usually for business-purpose investment property, not a home you plan to live in.
From first check to loan choice
- 1
Estimate rent
Provide a current lease or market-rent evidence. The lender decides which rent figure it accepts.
- 2
Estimate housing cost
Add principal, interest, taxes, home insurance, and applicable HOA dues under the lender’s method.
- 3
Compare coverage
Divide qualifying monthly rent by the payment the lender uses. A higher ratio means more rent relative to debt.
What affects your decision
Simple illustration
Divide accepted rental income by the lender-defined housing cost. A ratio above one means accepted rent exceeds that cost. This calculation does not establish loan eligibility.
Cash needs
Down payment, closing costs, and reserves can be higher than on an owner-occupied loan.
Property and title
Lenders may allow an LLC, but entity, lease, occupancy, and rental rules vary by program.
Prepare for a conversation
Documents to have ready
Lease or rent analysis, property details, insurance, asset statements, identification, and entity documents if applicable.
Ask this question
Which rent and payment figures will you use, and what reserves and prepayment terms apply?
This page is general education. Program terms, rates, fees, and eligibility depend on the lender and your application.
Compare the whole cost
Ask for written terms showing the rate, fees, full payment, reserves, cash needed, prepayment penalty, and any balloon payment. Business-purpose loans often do not receive the same federal consumer disclosures or protections as owner-occupied consumer mortgages. Do not rely on future rent or refinancing to meet the debt.
Get quick rate quote ↗