Investor Financing
DSCR Loans
Qualify on rental property cash flow — not personal income docs. Built for Indiana investors buying, refinancing, and scaling rental portfolios.
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What Is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio — a simple measure of whether a rental property earns enough to cover its mortgage payment.
Lenders divide the property's gross monthly rent by the total monthly housing cost (principal, interest, taxes, insurance, and HOA when applicable). When that ratio meets program minimums, the deal can qualify even if your personal tax returns don't tell the full story.
Guidelines vary by investor, property type, and loan amount. This overview is educational — your file gets reviewed against current product rules.
The formula
DSCR =
Gross Monthly Rent
÷
Total Monthly PITIA
A 1.0 ratio means rent equals the payment. Many programs target 1.0 or higher; some allow lower with compensating factors.
DSCR Tool
DSCR Calculator
Enter your property numbers to see the debt service coverage ratio. Most DSCR programs want 1.0 or higher — meaning the rent covers the full housing payment.
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Your Results
DSCR Ratio
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Loan amount–
Principal & interest–
Total PITIA payment–
Monthly cash flow–
Illustrative only — not a commitment to lend. Actual DSCR requirements vary by program, property type, and loan amount. All loans subject to credit and property approval.
How DSCR Financing Works
From property cash flow to keys in hand — the underwriting path investors follow.
01
Analyze cash flow
We estimate gross rent (lease, market rent, or STR history) and calculate DSCR against the proposed payment.
02
Match the ratio
Your file is matched to investors whose DSCR thresholds, credit, and down-payment rules fit the property.
03
Underwrite the asset
Focus stays on the property — appraisal, lease or rent schedule, reserves, and entity docs when applicable.
04
Close in your name or LLC
Fund the purchase or refinance and add the unit to your portfolio without stacking personal DTI.
Who DSCR Loans Are For
Real estate investors — not primary-home buyers looking for owner-occupied agency financing.
Buying your first or next rental property
Refinancing an existing investment to better terms
Scaling a portfolio without maxing personal DTI
Purchasing through an LLC when program allows
Self-employed investors with strong properties but complex personal returns
Not the right fit if…
- — You plan to live in the property as your primary residence
- — You need agency down payments below investor minimums
- — The property cannot support a qualifying rent-to-payment ratio
Key Benefits for Investors
Qualify on property income
Underwriting weighs whether the asset pays for itself. That opens doors for investors whose personal returns don't reflect actual cash flow.
Typical target: 1.0+ DSCR
Fewer personal docs
No W-2 or full tax-return income calc for many programs.
Portfolio growth
Add units without each rental consuming personal DTI capacity.
Entity closing
Close in an LLC name when investor guidelines allow.
Purchase or refi
Buy-and-hold, cash-out, or rate-term refi on rentals.
Eligibility & Qualifying Criteria
Typical investor guidelines — your scenario may differ. We confirm exact numbers before you write an offer.
DSCR threshold
Often 1.0 or higher
Some programs allow 0.75–0.99 with adjustments
Credit profile
Mid-600s and up common
Better pricing with stronger scores
Down payment
Often 20–25%
Varies by occupancy, units, and investor
Reserves
Commonly 3–6 months PITIA
May increase with multiple financed properties
Property types
1–4 unit residential
SFR, duplex, triplex, fourplex investor scenarios
Loan purpose
Purchase, rate/term, cash-out
Investment occupancy only — not primary homes
All loans subject to credit and property approval. Program guidelines vary by investor and change without notice.
Typical Use Cases
01
Buy-and-hold rentals
Acquire cash-flowing SFR or small multifamily with qualification driven by lease or market rent.
02
Cash-out for next purchase
Pull equity from a performing rental to fund down payment on your next acquisition.
03
Refinance to better terms
Replace higher-rate investor debt when the property still meets DSCR minimums.
04
Short-term rentals
Where guidelines allow, use documented STR income or market analysis for vacation-rental markets.
Application Process
A straightforward path from first conversation to closing.
01
Strategy call
Share the property address, rent estimate, and goals. We run preliminary DSCR and match a program.
02
Pre-approval & docs
Complete application, credit pull, entity docs if applicable, and property rent documentation.
03
Underwriting
Appraisal, title, and investor review focused on asset quality and coverage ratio.
04
Clear to close
Final conditions, signing, and funding — keys or recorded refi in your portfolio.
Mortgage Knowledge Center
Common DSCR Loan Questions
Straight answers on DSCR math, down payment, credit, reserves, rates, prepay, and more — written for Indiana investors.
What Is a DSCR Loan?Who Qualifies for a DSCR Loan?What Does DSCR Mean?How Is DSCR Calculated?What DSCR Ratio Is Required?Do DSCR Loans Require Tax Returns?Is Employment Verified for DSCR?Can LLCs Borrow With DSCR?What Property Types Qualify for DSCR?Can I Buy Short-Term Rentals With DSCR?Can Airbnb Income Qualify for DSCR?Can I Refinance With DSCR?Can I Do Cash-Out With DSCR?How Much Down Payment Is Required?What Credit Score Is Needed?Are Reserves Required?Can First-Time Investors Qualify?What Interest Rates Should I Expect?Are There Prepayment Penalties?Is DSCR Right for Me?
Ready to Fund Your Next Rental?
Talk with Ryan and Steve about DSCR pre-approval for Indiana investment properties — or run your numbers in the calculator first.