DSCR Loan Investor Qualifier
DSCR loan: ratio >= 1.0 means rental income covers PITI. 1.25+ ideal. No personal income docs needed for investor loans.
| Monthly rent | — |
| Monthly PITI | — |
| DSCR | — |
| Verdict | — |
DSCR (Debt Service Coverage Ratio) loans evaluate investment properties by the rent-to-PITI ratio rather than borrower income. 1.0+ means rent covers mortgage payment. Most lenders require 1.25+ for best rates.
DSCR Calculation
DSCR = Monthly Rent / Monthly PITI (Principal + Interest + Taxes + Insurance). Some include vacancy/maintenance reserves (PITIA). 1.0 = break-even. 1.25+ = positive cash flow.
Loan Terms
Investment property: 20-25% down. Rates 0.5-1.5% above conforming. No income verification. No employment verification. Closing in 30-45 days typical. Limit on number of properties owned (10 typical).
When DSCR Wins
Self-employed without full doc. Multiple existing properties. Cash-flow positive deals where personal DTI would fail. Investment-only borrowers. Better than commercial loans for under-$2M residential investment.
Last updated May 2026. Sources: BiggerPockets DSCR.