DSCR Loans: The Complete Guide for Real Estate Investors
Debt Service Coverage Ratio (DSCR) loans qualify you based on the property's rental income — not your personal income, tax returns, or employment. If the property cash-flows, you may qualify. PeerSense connects investors with the right DSCR lender for their deal.
The Bank Said No. The Property Says Yes.
You have a rental property that generates real income. The numbers work. But when you go to a conventional lender, they look at your tax returns — and what they see does not match what you know the business actually earns. Depreciation. Write-offs. Schedule E losses that exist on paper but not in reality.
Or maybe you have already maxed out conventional financing. Most conforming programs limit you to 6–10 financed properties, and you have been building past that.
Or you are self-employed. Or a foreign national. Or the deal just moves too fast for a 45-day conventional process.
DSCR loans were built for exactly this situation. The lender looks at one number: does the property's rental income cover the mortgage payment? If yes, you have a path forward — regardless of what your personal tax return looks like.
The challenge is finding the right lender. Not every DSCR program handles short-term rentals. Not every lender funds LLCs cleanly. Some accept a 1.0 Debt Service Coverage Ratio, others require 1.25 or more. Rates and terms vary more than most investors realize, and picking the wrong lender costs you points, time, or the deal itself.
That is where PeerSense comes in. Whether you need DSCR financing, fix-and-flip financing, bridge loans for commercial properties, or other capital solutions, we connect you with the right lender for your specific deal.
How DSCR Loans Actually Work
A DSCR loan qualifies you based on the property's rental income rather than your personal income, W-2s, tax returns, or debt-to-income ratio. Here is the math:
DSCR = Gross Rental Income ÷ Total Monthly Debt Obligations
(principal + interest + taxes + insurance)
A DSCR of 1.25 means the property generates 25% more income than needed to cover the full payment. This is where most lenders want to be.
A DSCR of 1.0 means the property breaks even — income exactly covers the payment. Many lenders accept this, though terms tighten.
A DSCR below 1.0 means the property does not fully cover its costs on paper. Specialized programs exist for this scenario with the right credit and reserves.
What you do not need:
- W-2s or pay stubs
- Personal tax returns
- Debt-to-income ratio analysis
- Employment history or verification
What lenders do look at:
- The property's actual or projected rental income (verified by appraisal or lease)
- Your credit score — 620 minimum on most programs; 680+ for the best pricing
- Loan-to-Value (LTV) — typically 75%–80% on purchases (20–25% down)
- Reserves — typically 3–6 months of PITIA in liquid assets
- Entity structure — LLC, corporation, or personal name
Current rates as of early 2026:
Approximately 6.00%–7.50% for qualified borrowers with strong DSCR and credit. Down meaningfully from the 8–9% range seen through most of 2024.
Four Common DSCR Scenarios
Not all DSCR loans are the same. The right program depends on your property type, rental strategy, and investor profile.
Long-Term Rental (LTR)
Traditional 12-month lease structure. The most straightforward DSCR scenario. Lenders verify income through existing leases or market rent appraisals. Typically the lowest rates and most flexible terms.
Best for:
Buy-and-hold investors with stable tenants, single-family or multifamily properties with traditional leases.
Short-Term Rental (STR)
Airbnb, VRBO, or other platforms with nightly or weekly bookings. Not every DSCR lender handles STRs — many require 12+ months of documented rental history or use a conservative appraisal method that undervalues actual income. The right lender makes all the difference.
Best for:
Vacation rental operators, investors in tourist markets, properties with strong STR performance history.
Portfolio or Blanket Loan
Financing multiple properties under one loan structure — sometimes called a blanket DSCR loan. Instead of financing each property separately, a portfolio loan consolidates them. Useful for investors scaling past 4–5 properties who want to simplify their debt stack.
Best for:
Established investors with 5+ rental properties looking to consolidate or finance new acquisitions at scale.
Foreign National DSCR
Non-U.S. citizens can access DSCR financing for U.S. investment properties with the right lender. Programs exist for foreign nationals and non-permanent residents. Typically requires 30%–35% down and a slightly higher credit standard. Not every DSCR lender does foreign national deals — knowing which ones do saves months.
Best for:
International investors acquiring U.S. rental property, non-resident investors, ITIN borrowers.
Check Your DSCR
Plug in your rental income and expenses to see if your deal qualifies — and at what rate tier.
Why the Right Match Matters More Than the Rate
Most real estate investors learn about DSCR loans the hard way — they go to a lender who seems competitive, spend three weeks getting through underwriting, and discover at the end that the lender does not handle STRs, or does not fund LLCs cleanly, or requires 1.25 DSCR when the property is at 1.08.
Rate shopping alone is not enough. The right lender for your deal depends on:
- Your Debt Service Coverage Ratio and how conservative the lender's underwriting is
- Whether the property is a long-term or short-term rental
- Your entity structure — some programs handle LLCs differently than others
- Your credit profile and what flexibility exists at your score
- Your timeline — some lenders close in 10 days, others take 45
- Your state — not all DSCR lenders are licensed everywhere
PeerSense has worked with the lenders who close these deals. We know which sources handle below-1.0 DSCR. We know who moves fastest on STR deals. We know who funds foreign nationals cleanly and who does not.
One conversation. We assess your deal, tell you where it fits, and connect you directly with the source most likely to close it.
No application fees. No upfront costs. PeerSense earns a referral fee at closing — paid by the lender or split with the borrower depending on the deal, established upfront in our agreement before any work begins.
If you're a business owner looking for operating capital rather than real estate financing, SBA financing for business owners may be a better fit. View all capital solutions to explore your options.
Who DSCR Loans Work For
Understanding whether your deal is a strong fit helps set realistic expectations from the start.
Strong Fit
- Rental property with consistent income (LTR) or documented STR history
- Investor with 620+ credit score and 20–25% down
- Self-employed investor whose tax returns understate actual income
- LLC or entity buyer who wants to keep the loan off personal credit
- Portfolio investor who has exceeded conventional financing limits
- Foreign national acquiring U.S. investment property
May Need a Different Path
- Primary residence — DSCR loans are for investment properties only
- New construction with no rental history — most programs need market rent verification
- Sub-600 credit score — some programs exist, but options are limited
- Property that does not qualify for standard appraisal (extreme condition issues)
Not sure where you fit?
Tell us about the deal. PeerSense will give you a straight answer in the first conversation.
Tell Us About the Property
If the property cash-flows and you can put 20–25% down, there is likely a DSCR program that works for your deal. The question is which one — and that depends on your specific situation. PeerSense connects investors with the right DSCR lender for their deal. One conversation. Direct introduction. No runaround.
Or call (317) 452-6990 to talk through your deal directly.
Want to run the numbers first? Use our DSCR Calculator
Frequently Asked Questions
Related Resources
DSCR Calculator
Check your property's DSCR ratio or estimate monthly payments, cash-on-cash return, and total cash needed — instantly.
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