Long-Term Financing Based on Property Cash Flow
DSCR financing is designed for real estate investors purchasing or refinancing income-producing rental properties.
Rather than relying primarily on personal employment income, these programs evaluate whether the property’s rental income can support its proposed debt payment.
- Purchase, refinance, and eligible cash-out options
- Qualification based primarily on rental-property cash flow
- Personal tax returns may not be required
- Fixed-rate and adjustable-rate options may be available
- Interest-only payment options may be available
Up to 80% LTV*
Maximum leverage depends on credit, property cash flow, value, purpose, and lending partner.
30-Year Options*
Fixed-rate, adjustable-rate, and interest-only structures may be available.
$75K–$3M*
Loan limits vary based on property type, value, location, and lending partner.
660+ FICO*
Credit score, reserves, rental income, and property details affect eligibility and terms.
*Maximum leverage, loan amounts, credit requirements, and eligibility are not guaranteed. Guidelines vary by borrower, property, location, and lending partner.
What Is a Debt Service Coverage Ratio?
DSCR measures the relationship between the property’s qualifying rental income and its proposed monthly housing expense.
A ratio of 1.00 generally means the qualifying rental income is equal to the applicable monthly debt obligation. A higher ratio indicates that the property produces more income relative to the payment.
Each lending partner may calculate qualifying income and expenses differently, so the final DSCR is determined during underwriting.
Example: $2,000 in qualifying rent divided by a $1,800 applicable monthly payment produces an approximate DSCR of 1.11.
Purchase, Refinance or Access Equity
Available leverage varies based on the loan purpose, property value, credit profile, and qualifying rental income.
Purchase
Long-term financing for investors acquiring qualifying non-owner-occupied rental properties.
Rate-and-Term Refinance
Replace short-term or existing financing with a qualifying long-term rental loan.
Cash-Out Refinance
Eligible investors may access property equity for another qualifying investment or business purpose.
From Rental Scenario to Closing
Rental income, property expenses, credit, reserves, and loan purpose help determine available financing.
Submit the Property
Provide the property, requested loan amount, estimated rent, expenses, value, occupancy, and loan purpose.
Review Cash Flow
We review the preliminary DSCR, borrower profile, and property information against available rental programs.
Complete Due Diligence
The selected lending partner completes valuation, rent analysis, title, underwriting, and closing requirements.
Built for Non-Owner-Occupied Rentals
DSCR loans are business-purpose loans intended for investment properties rather than a borrower’s primary residence.
The property type, occupancy, rental use, condition, location, and appraised value all affect program eligibility.
What Helps Determine Eligibility?
DSCR qualification considers both the property and the borrower’s overall investment profile.
Rental Income
Current leases, market rent, and appraisal rent estimates may be used to determine qualifying income.
Property Expenses
Taxes, insurance, association dues, and the proposed payment affect the DSCR calculation.
Credit and Reserves
Credit score and available liquidity influence leverage, pricing, reserve requirements, and eligibility.
Property Value
The appraised as-is value and loan purpose help establish maximum available financing.
DSCR Rental Loan FAQs
General answers about long-term rental-property financing.
What does DSCR mean?
DSCR stands for Debt Service Coverage Ratio. It compares qualifying property income with the applicable monthly property debt obligation to help determine whether the rental can support the loan.
Do I need personal income or employment verification?
Many DSCR programs qualify primarily using property cash flow rather than traditional employment income. Personal tax returns, W-2s, and pay stubs may not be required, although other borrower documentation is still necessary.
Does the property need to be currently rented?
Not always. Certain purchase and vacant-property scenarios can use an appraiser’s market-rent estimate. Requirements vary by property and lending partner.
Can I qualify if the DSCR is below 1.00?
Selected programs may consider a ratio below 1.00 with adjusted leverage, pricing, reserves, or other requirements. Availability depends on the complete scenario.
Can I finance a short-term rental?
Short-term and vacation rentals may be eligible under selected programs. Underwriting may consider long-term market rent, historical short-term rental income, or both.
Can I close the loan in an LLC?
DSCR loans are generally business-purpose loans and commonly close in an eligible borrowing entity such as an LLC. Final entity requirements vary by lending partner.
Are there prepayment penalties?
Some long-term rental programs include adjustable prepayment structures, while others may offer reduced or no-prepayment options. The selected structure can affect pricing.
What documents should I provide?
Helpful items include the purchase contract or mortgage statement, leases, rent roll, insurance estimate, property expense information, entity documents, and current property details.
Have a Rental Property in Mind?
Submit the property, rental income, expenses, requested loan amount, value, and financing purpose for a preliminary DSCR review.
Borrowers Capital LLC is a private lending broker and capital placement resource, not a direct lender. This information is for general informational purposes only and is not a commitment to lend or an offer of credit. Programs, rates, leverage, loan amounts, terms, DSCR calculations, and eligibility are subject to change and depend on borrower qualifications, property cash flow, value, location, due diligence, underwriting, and final approval by the lending partner.