An investment property. A clearer next step.
A DSCR loan may evaluate qualifying rental income relative to the property’s debt payment. Let’s review the property and the program requirements.
How a DSCR loan works
DSCR stands for debt service coverage ratio. It compares a property’s qualifying rental income with its monthly payment, including principal, interest, taxes, insurance and any HOA dues.
Illustration only
If a property’s qualifying rent is $3,000 a month and its total monthly payment is $2,500, the ratio is 1.2 ($3,000 ÷ $2,500). Each lender sets its own minimum ratio and decides how rental income is determined.
Who it may fit
- Investors buying or refinancing a residential rental property
- Borrowers who prefer the property’s income, rather than personal income, to drive qualification
- Investors adding to an existing portfolio
DSCR loans are for investment properties, not homes you’ll live in.
What still applies
Credit, down payment or equity, reserves, property type and condition, and each lender’s minimum ratio all matter. Not every investor or property qualifies, and pricing is typically different from owner-occupied loans.
DSCR or self-employed documentation?
A DSCR loan looks at the property’s income. Self-employed options look at your own income, documented with bank statements or other permitted records. Conventional investment property loans are another option to compare.
Ask about investor financing.
Tell Curtis about the property and your goals. We’ll compare DSCR and other investor options side by side.
Call (602) 800-9916 or email curtis@clarke-cap.com
