Debt Service Coverage Ratio (DSCR) Loans are designed for real estate investors looking to qualify based on rental income, not personal income. If the property cash flows, you may qualify — no tax returns or traditional documentation required. We’ll help you secure financing that makes sense for your investment goals.
A DSCR loan is a mortgage used to purchase or refinance income-producing property based on the property’s ability to generate rental income, not the borrower’s tax returns or W-2s. Lenders evaluate the deal based on the income the property produces.
Instead of looking at your employment history or personal debt, lenders focus on the property’s Debt Service Coverage Ratio. If the expected rental income covers the monthly mortgage payment (typically a DSCR of 1.0 or higher), you may qualify without standard income verification.
These loans are ideal for real estate investors, landlords, and LLCs buying short-term rentals or long-term rentals. They also work well for borrowers with complex income streams or those who prefer to keep business and personal finances separate.
Yes. Many lenders accept short-term rental income like Airbnb or Vrbo as part of the DSCR calculation. You may need a history of bookings or projections from a rental platform to verify income expectations.
No. That’s one of the biggest benefits. DSCR loans do not require pay stubs, W-2s, or tax returns. Qualification is based entirely on the income potential of the investment property itself, making them faster and more flexible.
Many DSCR programs allow you to finance multiple properties, sometimes with no set limit. This makes it easier for serious investors to grow their portfolios without hitting traditional mortgage caps.
At LUMI Funding Group, we specialize in investor-focused lending solutions that keep the process efficient, fast, and aligned with your goals. Whether you’re purchasing a single rental or scaling into multiple doors, our team understands the income-based approach and works to secure you a strong rate without the paperwork delays. We help you close quickly so you can stay competitive in the market.
Understand how DSCR loans work, how they’re calculated, and why they’re a favorite tool among experienced and first-time investors alike. We’ve answered the most common questions below.
Most lenders look for a DSCR of at least 1.0, meaning the rental income equals the mortgage payment. A higher ratio can lead to better terms, but some lenders offer programs for properties with slightly lower DSCRs.
DSCR loans are available for residential investment properties such as single-family rentals, condos, townhomes, duplexes, triplexes, fourplexes, and even multifamily buildings up to four units.
Yes. Many DSCR loan programs allow title to be held in an LLC or business entity, making them a strong option for investors managing properties professionally.
For existing rentals, lenders may use lease agreements, tax forms, or appraiser rent schedules. For new purchases, projected market rent is often determined by the appraisal’s comparable rental analysis.
In many cases, yes. Lenders may ask for several months of reserves to cover mortgage payments, especially if the DSCR is close to 1.0. The exact requirement depends on the lender and loan structure.
Yes. DSCR loans are frequently used by international investors looking to buy U.S. real estate. These programs often have flexible guidelines and limited documentation requirements.
DSCR loans are ideal for real estate investors who want to qualify using rental income instead of traditional employment documentation. These loans provide flexibility, faster closings, and the ability to scale your portfolio without jumping through hoops. Whether you’re buying long-term rentals or short-term vacation properties, a DSCR loan can give you access to financing that prioritizes the investment, not your personal income.
