DSCR & rental property financing
Finance rentals based on how the property performs.
DSCR loans let some lenders focus on a property’s rental income rather than primarily on your personal income. Alexandro is a real estate investor too — so the conversation starts with the deal, the cash flow and your next move.
About a minute. No credit check. No obligation.
On a hard-money or bridge loan?
If you have a maturity date coming up, start with the refinance plan.
Hard-money refinanceHow it works
The ratio, in plain English
DSCR = monthly rent ÷ monthly housing expense. A ratio above 1.0 means the rent covers the payment in that example; below 1.0 means it doesn’t. Each lender sets its own minimum and calculates rent and expenses its own way.
What lenders commonly look at
- Rental income — a lease, or a market-rent estimate from the appraisal
- The full monthly housing expense: principal, interest, taxes, insurance, HOA
- Down payment or equity in the property
- Credit history
- Reserves (cash or liquid assets after closing)
- Property type and condition; experience as an investor for some programs
Try it
Does the rent cover the payment?
Use your own numbers. This is an educational ratio, not a lender’s determination.
Calculate a property’s DSCR
Debt service coverage ratio = monthly rent ÷ monthly housing expense.
Enter the monthly rent and the property’s monthly costs to see the ratio.
For illustration only. This is not a rate quote, loan estimate, or promise of terms. Results depend entirely on the numbers you enter. Actual rates, payments, and eligibility depend on your situation, the lender, and market conditions.
Rental financing
Common situations Alexandro helps with
Rental purchase
Cash-out on a rental
Rate-and-term refinance
Growing portfolios
Planning the next purchase
DSCR and other investor programs are offered by some lenders, not all, and requirements change over time. This page is educational and is not a commitment to lend.
Loan programs, terms, availability, and eligibility vary by state, lender, property, and borrower profile. Not every program is available in every state. Licensing information.
FAQ
DSCR loan questions
Straight answers in plain English. For anything specific to you, Alexandro can walk through it.
What is a DSCR loan?
DSCR stands for debt service coverage ratio. Instead of relying primarily on your personal income, some lenders look at how the property’s rent compares to its monthly housing expense (principal, interest, taxes, insurance and any HOA dues). Requirements — including minimum ratios, down payment, reserves and credit — vary by lender.
Do I need tax returns for a DSCR loan?
Many DSCR programs don’t use personal tax returns to calculate income, which is one reason investors and self-employed borrowers look at them. You’ll still need to document things like the property, rent, assets and credit. Exact documentation varies by lender.
Can I use a DSCR loan for a short-term rental?
Some lenders consider short-term rental income and others don’t, and how they estimate that income differs. Share the property details and Alexandro can review which lenders may consider it.
Can I close in an LLC?
Some investor programs allow vesting in an entity such as an LLC. Requirements vary by lender. Talk with your attorney or CPA about the right entity structure for you.
Is a DSCR loan a consumer loan?
DSCR loans are generally business-purpose loans for investment properties, which can mean different disclosures and protections than a loan on your own home. Ask Alexandro how this applies to your transaction.
Other ways Alexandro can help
- HELOC & home equityAccess equity while keeping your first mortgage.
- Cash-out & rate-and-term refinanceSee whether refinancing actually helps.
- Hard-money refinancePlan the exit from short-term investor debt.
- Purchase & preapprovalGet ready to make a strong offer.
- Self-employed & nontraditional incomeWhen your income doesn’t fit a W-2 box.
Share the property details.
Property type, purchase or refinance, and your timing — Alexandro will follow up about which investor programs may fit.