What is a DSCR loan?
By AbeAugust 12, 2026DSCR Loans
Short Answer
A DSCR loan is an investment-property mortgage that focuses primarily on the property's rental income rather than the borrower's personal employment income.
Full Detailed Answer
DSCR means Debt Service Coverage Ratio. In simple terms, the lender compares qualifying rent with the property's required housing payment. The exact calculation varies, but it generally considers principal, interest, taxes, insurance, and association dues when applicable.
Because the property is central to qualification, many DSCR programs do not require personal tax returns or traditional employment-income verification. The lender still reviews the borrower's credit, assets, experience, property type, appraisal, lease or market rent, and available reserves.
DSCR loans are generally intended for non-owner-occupied investment properties, not a home you plan to occupy. Rates, down payments, prepayment provisions, entity-vesting rules, and minimum ratios vary by lender, so the full structure matters—not just whether the rent appears to cover the payment.
What Abe Will Review
- Expected or documented rental income
- Total qualifying property payment
- Credit and available reserves
- Property type and investment use
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