A DSCR loan is an alternative mortgage solution for real estate investors. While traditional home loans use personal income and overall debt commitments to determine DTI and eligibility, DSCR loans leverage the property’s earning potential as the primary qualification. Debt-service coverage ratio (DSCR) is a metric used by lenders to assess the ability of the property to generate enough cash flow to cover its debt obligations, such as principal, interest, taxes, insurance and association dues.

How is DSCR calculated?

To calculate DSCR, you’ll divide the monthly rental income of a property by its monthly debt obligations. DSCR = Monthly Rent ÷ Principal, Interest, Taxes, Insurance, and Association Dues (PITIA) Try our DSCR Calculator to see if your prospective property meets minimum DSCR requirements.

What is the minimum down payment required for a DSCR loan?

Down payment requirements may vary by lender. However, investors seeking a DSCR loan should expect to put down between 20% and 30% of the property’s purchase price. While a 20% down payment is the minimum to receive a DSCR loan from Viso, you may need to put more down depending on various factors, including credit score, property type and market conditions.

What is the minimum credit score needed for a DSCR loan?

The minimum credit score requirements may vary by lender. Investors seeking a DSCR loan should aim for a credit score of at least 620. While 620 is the minimum, higher scores generally lead to more favorable rates and terms. In addition to scores, lenders may look at credit experience, which is based on the number as well as the type and length of tradelines listed on your credit report.

What documentation is needed for a DSCR loan?

Since DSCR lenders don’t look at personal income, documents like tax returns and pay stubs aren’t required. Although lenders require other types of documentation, which include: One form of ID for each guarantor Voided check Insurance declaration page Lender’s title insurance policy Property appraisal Business entity documents (if borrowing through a company) HOA contact information (if applicable) Current lender details (for both cash-out/rate and term refinances) Purchase contract Any addenda to the purchase contract

Do DSCR loans have prepayment penalties?

Yes, the majority of DSCR loans come with prepayment penalties. A prepayment penalty means the borrower is required to pay the lender an additional fee for paying off the loan early. Prepayment penalty structures may vary by lender. Here are the three common DSCR prepayment penalty structures: Five-year step-down penalty: The 5/4/3/2/1 structure states that if the borrower pays off the loan in year one, they have a 5% prepayment penalty fee, in year two, a 4% fee and so forth Three-year step-down penalty: The 3/2/1 structure is slightly different, requiring the borrower to pay a 3% fee if the loan is paid off in the first year, 2% in the second year, and 1% in the third year. Fixed penalties: This structure will outline a specific percentage for a set period Before committing to paying off the loan early, it’s important to check your loan agreement for specific information regarding the prepayment penalties.

What are the pros DSCR loans?

DSCR loans can be a great financing option for real estate investors. Here are some pros of DSCR loans that can help you determine if it’s the best solution for your overall investment strategy. Pros of DSCR loans: No personal income verification: DSCR is the primary qualifying metric instead of DTI 30-year fixed terms: Flexible terms with no balloon payments Entity borrowing options: Investors can borrow under an LLC or a corporation Scalability: Finance multiple properties with flexible portfolio limits. Higher thresholds are subject to executive approval Streamlined process: Quick application and fast closing times

Can you refinance a DSCR loan?

Yes, you can refinance a DSCR loan. Just like traditional loans, DSCR loans offer both cash-out and rate and term refinance options. However, be sure to check whether refinancing will trigger a prepayment penalty.

Where is the best place to get a DSCR loan?

FundNow Capital works with many DSCR lenders. With more than a decade of experience helping residential real estate investors secure short- and long-term rental properties, we we only work with lenders that have refined and perfected the lending process. Our dependable and flexible loan options are perfect for both newcomers and veteran investors who are looking to obtain funding without the need to show personal income.

DSCR Loans | FundNow Capital

🏠 DSCR Loans for Real Estate Investors

Fund Your Next Property Based on Rental Income — Not Personal Income

At FundNow Capital, we specialize in DSCR loans for real estate investors across all 50 states. Our network of top-tier alternative lenders means you don’t have to fit the mold banks require. Whether you're buying your first investment property or your fiftieth, we provide:

🔍 Personalized loan matching with DSCR-friendly lenders
📁 Streamlined application process with minimal documentation
⏱ Fast approvals — often within 24–72 hours
💰 Funding amounts up to $5M+
🧾 Options for short-term rentals (Airbnb/VRBO), long-term rentals, and mixed-use properties
Single-family homes, duplexes, triplexes, fourplexes, and even multi-units (5+ doors) may qualify.

✅ What Is a DSCR Loan?

A DSCR loan (Debt Service Coverage Ratio loan) is a real estate investment loan that uses your property's income potential—not your personal tax returns—to qualify you. Lenders assess whether the rental income from the property covers the mortgage payments, allowing you to qualify even if your personal income is complex, inconsistent, or unavailable.

This loan is ideal for:

Real estate investors growing rental portfolios
Entrepreneurs with high write-offs
Self-employed individuals
Investors buying short-term or long-term rental properties

At FundNow Capital, we’re not your typical lender—we’re your funding advocate. With access to over 80+ lenders in our nationwide network, we give you more options, better terms, and faster approvals than traditional banks. While banks often say “no” based on rigid credit criteria or outdated underwriting, we say “let’s find a way.”

What sets us apart:

✅ Higher Approval Odds – Our broad network increases your chances of approval, even if you’ve been denied elsewhere.
✅ Custom Funding Solutions – Whether you're a business owner, real estate investor, or startup founder, we tailor funding to fit your goals—not the bank’s box.
✅ Dedicated Advisors – Our team works for you, not the lender. We fight to get you the best deal, fastest close, and smoothest experience possible.
✅ Smart, Fast Capital – Need speed? We streamline everything so you can get approved and funded without delays or red tape.

So whether you've been denied by a bank or just want a faster, smarter funding solution, FundNow Capital is here to help you move forward with confidence.

FundNow Capital connects you to capital without the hassle.

What is a DSCR loan?
A DSCR loan is an alternative mortgage solution for real estate investors. While traditional home loans use personal income and overall debt commitments to determine DTI and eligibility, DSCR loans leverage the property’s earning potential as the primary qualification.

Debt-service coverage ratio (DSCR) is a metric used by lenders to assess the ability of the property to generate enough cash flow to cover its debt obligations, such as principal, interest, taxes, insurance and association dues.
How is DSCR calculated?
To calculate DSCR, you’ll divide the monthly rental income of a property by its monthly debt obligations.

DSCR = Monthly Rent ÷ Principal, Interest, Taxes, Insurance, and Association Dues (PITIA)

Try our DSCR Calculator to see if your prospective property meets minimum DSCR requirements.
What is the minimum down payment required for a DSCR loan?
Down payment requirements may vary by lender. However, investors seeking a DSCR loan should expect to put down between 20% and 30% of the property’s purchase price. While a 20% down payment is the minimum to receive a DSCR loan from Viso, you may need to put more down depending on various factors, including credit score, property type and market conditions.
What is the minimum credit score needed for a DSCR loan?
The minimum credit score requirements may vary by lender. Investors seeking a DSCR loan should aim for a credit score of at least 620. While 620 is the minimum, higher scores generally lead to more favorable rates and terms. In addition to scores, lenders may look at credit experience, which is based on the number as well as the type and length of tradelines listed on your credit report.
What documentation is needed for a DSCR loan?
Since DSCR lenders don’t look at personal income, documents like tax returns and pay stubs aren’t required. Although lenders require other types of documentation, which include:

One form of ID for each guarantor
Voided check
Insurance declaration page
Lender’s title insurance policy
Property appraisal
Business entity documents (if borrowing through a company)
HOA contact information (if applicable)
Current lender details (for both cash-out/rate and term refinances)
Purchase contract
Any addenda to the purchase contract
Do DSCR loans have prepayment penalties?
Yes, the majority of DSCR loans come with prepayment penalties. A prepayment penalty means the borrower is required to pay the lender an additional fee for paying off the loan early. Prepayment penalty structures may vary by lender. Here are the three common DSCR prepayment penalty structures:

Five-year step-down penalty: The 5/4/3/2/1 structure states that if the borrower pays off the loan in year one, they have a 5% prepayment penalty fee, in year two, a 4% fee and so forth
Three-year step-down penalty: The 3/2/1 structure is slightly different, requiring the borrower to pay a 3% fee if the loan is paid off in the first year, 2% in the second year, and 1% in the third year.
Fixed penalties: This structure will outline a specific percentage for a set period
Before committing to paying off the loan early, it’s important to check your loan agreement for specific information regarding the prepayment penalties.
What are the pros DSCR loans?
DSCR loans can be a great financing option for real estate investors. Here are some pros of DSCR loans that can help you determine if it’s the best solution for your overall investment strategy.

Pros of DSCR loans:

No personal income verification: DSCR is the primary qualifying metric instead of DTI
30-year fixed terms: Flexible terms with no balloon payments
Entity borrowing options: Investors can borrow under an LLC or a corporation
Scalability: Finance multiple properties with flexible portfolio limits. Higher thresholds are subject to executive approval
Streamlined process: Quick application and fast closing times
Can you refinance a DSCR loan?
Yes, you can refinance a DSCR loan. Just like traditional loans, DSCR loans offer both cash-out and rate and term refinance options. However, be sure to check whether refinancing will trigger a prepayment penalty.
Where is the best place to get a DSCR loan?
FundNow Capital works with many DSCR lenders. With more than a decade of experience helping residential real estate investors secure short- and long-term rental properties, we we only work with lenders that have refined and perfected the lending process. Our dependable and flexible loan options are perfect for both newcomers and veteran investors who are looking to obtain funding without the need to show personal income.
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To qualify for a DSCR (Debt Service Coverage Ratio) loan, you don’t need tax returns or traditional income documentation. Instead, the loan is based on the cash flow of the investment property itself. Here’s exactly what you’ll need:

✅ DSCR Loan Qualification Requirements

1. Minimum Credit Score

680+ (Some lenders accept 660, but higher scores get better rates)

2. DSCR (Debt Service Coverage Ratio)

Must be 1.0 or higher
This means the property's monthly rental income equals or exceeds the monthly mortgage payment (PITIA = principal, interest, taxes, insurance, HOA)

3. Down Payment

Typically 20%–25%
Based on the purchase price or appraised value

4. Property Type

Single-family homes, condos, townhomes, vacation homes, or 2–4 unit properties
Must be non-owner occupied

5. Borrowing Entity

Can be in your personal name or under an LLC or business entity (LLC preferred for investors)

6. Appraisal

A rental market analysis (RMA) or short-term rental report is required to determine income potential

7. Proof of Rental Income

Can be lease agreements, Airbnb statements, or market rent estimates

8. Cash Reserves

3–6 months of reserves for PITIA payments
Can be in checking, savings, retirement accounts, or business accounts

9. Property Condition

Must be rent-ready (in good condition, no major rehab needed)
Some lenders allow light renovations post-closing

10. Documentation (Minimal)

No tax returns or W-2s
You’ll typically need:
Valid ID
Purchase contract
Business entity documents (if applicable)
Insurance info
Voided check for funding
Appraisal report

🔑 Bonus: Why Investors Prefer DSCR Loans

No DTI (Debt-to-Income) calculations
Easier for self-employed borrowers
30-year fixed terms
Available for short-term and long-term rental properties
Multiple properties can be funded—even if you already have other mortgages

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DSCR Loans for Real Estate Investors

🏠 DSCR Loans for Real Estate Investors

✅ What Is a DSCR Loan?

💼 Why DSCR Loans Make Sense

4444🚀 How FundNow Capital Helps You Get Funded

01

We Learn About Your Business or Investment Goals

02

We Match You With the Right Lenders

03

You Get Pre-Qualified Offers Fast

04

We Guide You Through Closing

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FAQs About DSCR Loans

What is a DSCR loan?