Question 1

What is a DSCR loan?

Accepted Answer

A DSCR (Debt Service Coverage Ratio) loan qualifies borrowers based on a property’s rental income rather than personal income. If the property’s rental income covers at least 1.0x the monthly mortgage payment, you may qualify — no W-2s, tax returns, or DTI calculations needed.

Question 2

What DSCR ratio do I need to qualify?

Accepted Answer

Most lenders require a minimum DSCR of 1.0 (rental income equals mortgage payment). A DSCR of 1.25+ qualifies for the best rates. Some lenders offer “no-ratio” DSCR loans below 1.0, but at higher rates and larger down payments.

Question 3

Can I get a DSCR loan for an Airbnb?

Accepted Answer

Yes. Many DSCR lenders accept short-term rental income from platforms like Airbnb and Vrbo. Income is typically verified through a 12-month rental history, AirDNA projections, or a 1007 rent schedule from an appraiser.

Question 4

What is the minimum down payment for a DSCR loan?

Accepted Answer

Most DSCR loans require 20–25% down. Lower down payments (15–20%) may be available with higher credit scores (740+) and strong DSCR ratios (1.25+). Portfolio loans may have different requirements.

Question 5

Can I use an LLC to get a DSCR loan?

Accepted Answer

Yes. DSCR loans are one of the few mortgage products that allow borrowing through an LLC, corporation, or other business entity. This is a key advantage for investors seeking liability protection and pass-through tax treatment.