DSCR Investor FAQ

A DSCR (Debt Service Coverage Ratio) loan is an investment-property mortgage that qualifies on the property's rental income, not the borrower's W-2 income or tax returns. The DSCR ratio is calculated as monthly rent divided by monthly debt service (PITIA — principal, interest, taxes, insurance, association dues). When the property's rent covers the debt service, the loan can qualify.

Most DSCR programs accept a 1.0+ ratio (rent equals debt service). Lower ratios — including some sub-1.0 scenarios — may qualify with compensating factors such as larger down payments, higher reserves, or stronger borrower FICO. Specific minimums vary by program and pricing tier.

No. DSCR programs underwrite the property's rental income, not the borrower's personal income. There's no income verification, no W-2 review, and no tax-return analysis at the program level. Self-employed investors, retirees, and W-2 earners with complex returns all use the same path.

620+ FICO is the standard floor. Better pricing — higher LTV caps, lower rates — typically engages above 680, with the strongest tiers around 720+. Each scenario is priced per the current rate sheet at the time of lock.

Loan amounts up to $2,000,000 with maximum 80% LTV on most purchase scenarios. Cash-out refinance LTV caps are typically lower than purchase LTV. Loans below $50,000 are generally outside DSCR program scope.

Yes. Short-Term Rental DSCR is supported. Income may be documented through market-rent appraisal forms (1007 / 1025) or third-party data sources such as AirDNA. Programs that support STR will price the loan based on the documented rent assumption.

Up to 20 financed properties, including the subject property. Investors building portfolios beyond 10 properties typically structure loans through LLC entities for streamlined underwriting and asset management.

DSCR closes typically faster than a conventional mortgage because there's no income-document review, no employment verification, and no tax-return analysis. Actual timing varies by program, appraisal availability, title work, and borrower responsiveness. Expect a meaningful speed advantage versus a full-doc loan, but specific timelines are quoted per file once submitted.

Yes. The DSCR program rule of "no W-2, no tax returns" makes self-employed borrowers eligible at the program level. Final loan eligibility is subject to underwriter approval per file based on credit, reserves, property cash flow, and program guidelines at the time of application.

Yes — there are bridge variants of DSCR that finance the rehab phase, with the loan paid off through the flip exit. For BRRRR (Buy / Rehab / Rent / Refi / Repeat), DSCR is most commonly the long-term refinance step that takes out the short-term acquisition or rehab debt once the property is rented and stabilized.

No. Both LLC-vested and individually-vested properties are eligible. Many investors choose LLC vesting for asset protection or portfolio scaling, but DSCR programs accept either.

Homestead Capital Partners (NMLS #2587985) and NEXA Lending LLC (NMLS #1660690) are licensed in 48 states. The two excluded states are New York and Massachusetts.