Typical DSCR Loan Guidelines
Typical DSCR Loan Guidelines
Feature | Common Requirements |
Loan-to-Value (LTV) | Up to 80% (20% down) |
Property Type | 1-8 unit residential, short-term rentals (Airbnb), mixed-use |
Loan Amount | $100,000 to several million |
Documentation | No personal or business income verification, no tax returns required |
Interest Rate | Typically slightly higher than conventional loans (due to higher risk) 30-40 year fixed also have a 30 year fixed 10 year Interest Only. |
Prepayment Penalty | Common (1–5 years), but can sometimes be negotiated |
✅ 1. No Personal Income Verification
You don’t need to show W-2s, tax returns, or pay stubs. This is huge for:
- Self-employed borrowers
- Retirees
- Investors with write-offs that lower their taxable income
🧠 Lenders care about whether the property pays for itself — not whether you do.
✅ 2. Build a Portfolio Faster
Because DSCR loans aren’t limited by your personal DTI (debt-to-income) ratio:
- You can own multiple investment properties.
- You’re not capped just because your income “on paper” is low.
✅ 3. Easy to Scale with Passive Income
Perfect for investors using:
- BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat)
- Short-term rentals (Airbnb/VRBO)
- Turnkey or passive investing
You qualify based on rent projections or existing leases, making it easier to keep expanding.
✅ 4. Faster, Simpler Closings
- Less paperwork
- Fewer hoops to jump through
- Can close in 2–3 weeks in many cases
✅ 5. Flexibility
- Some lenders accept short-term rental income (Airbnb), not just long-term leases.
- Can use market rent via an appraisal rent schedule (Form 1007) if the property is vacant.
