A DSCR loan sizes on one question: does the rent cover the payment? No tax returns, no W2s, no employment verification, and no limit on how many properties you already own.
Run my numbersThirty seconds. Nothing is sent anywhere.
Published up front so you can work out whether you fit before you spend twenty minutes on the phone with me.
It is one division problem, and once you see it you can run your own deals.
Gross monthly rent. Either the lease you already have, or the market rent an appraiser assigns on the 1007 rent schedule. Whichever is lower is usually what counts.
PITIA. Principal, interest, taxes, insurance, and HOA dues. Everything the property costs you every month before management or repairs.
Rent divided by PITIA. At 1.00 the property pays for itself exactly. At 1.25 it throws off a cushion. Below 1.00 you are feeding it, and pricing reflects that.
Your job, your tax returns, your debt to income ratio, your other mortgages. The property stands on its own, which is the entire point.
Your accountant did their job and your tax returns show almost nothing. Agency underwriting reads that number. DSCR never asks for it.
Fannie and Freddie stop counting you at ten financed properties. DSCR lenders do not care how many you own.
Vesting in an entity is standard here, not an exception you have to argue for.
Several lenders will underwrite to projected or documented short term income instead of a long term lease.
No US credit and no social security number is a workable file with the right lender.
Seasoning requirements are shorter than agency. A bankruptcy or foreclosure in the last few years is not automatically fatal.
Real files. No names, no addresses. All three had already been turned down somewhere else, for three completely different reasons.
Why he was declined. Credit score the bank did not like, and no track record as an investor. On top of that he only needed $100,000, and most lenders will not quote a DSCR under $150,000 because the small ones are not worth their time.
What changed. Underwritten on the rent instead of him. He also moved title into his LLC at closing, and because DSCR is a business purpose loan the new mortgage did not land on his personal credit the way the old one had. That freed up room for the next purchase. Lender dependent, so confirm it rather than counting on it.
Why he was declined. Six units. The previous lender could not go past four, which is where residential lending stops and commercial begins. Nothing was wrong with the property or the borrower. The building was simply two units too big for the desk it landed on.
What changed. It went to lenders who do five plus units, where a six unit building is ordinary rather than an exception. Same property, same owner, same numbers, different desk.
Why he was declined. A mixed use building converted to residential, owned by someone with no rental history. Lenders kept passing on the property itself, not the borrower. The parking arrangement and the way cars got in and out past the neighboring businesses were enough for everyone to say no.
What changed. This one took actual work. Written explanations documenting the parking and the access, research on the surrounding parcels, and going through the lender portfolio until I found the one whose guidelines could live with it. Nobody wanted to touch this file. It funded anyway.
These are the situations that keep showing up. If one of them is yours, it is workable.
Under the $150,000 floor most lenders quote. Common on lower priced rentals in the Midwest and the South, and routinely declined for size alone.
No landlord history and a score the bank did not like. Neither is weighted the way a bank weights it when the property carries the file.
Converted use, shared parking, awkward access, an unusual parcel. Declines like these are about guidelines, not about whether the deal is good. Different lenders draw the line in different places.
Refinancing out of a personal name and into an entity at closing, which is standard here and an argument at a bank.
Returns show almost nothing because your CPA did their job. DSCR never asks for them.
Agency stops counting you at ten financed properties. DSCR does not count at all.
Past four units a residential lender has to hand the file back. Small apartment buildings, mixed use, storefront with units above, office condo. I keep going.
Use the calculator above or send me the address and the rent. I will tell you within a day whether it works and roughly where it prices.
I shop it across the network. Guidelines differ more than people expect, and the difference between the best and worst quote on the same file is real money.
The appraiser values the property and assigns market rent on a 1007. That number, or your lease, sets the ratio.
In your name or your LLC. Most files run two to three weeks from application once the appraisal is back.
Most lenders want 1.00 or better, meaning the rent covers the payment. Plenty will go down to 0.75 with more money down, and some offer no ratio programs where the property does not have to cover at all. A ratio of 1.25 or higher generally opens up stronger pricing options.
Sometimes. Most programs set the floor at 620, and below that your leverage usually caps around 50 to 65 percent. It is not an automatic decline, it just narrows which lenders will look at it. Worth a conversation rather than an assumption.
No. No tax returns, no W2s, no pay stubs, no employment verification, and no debt to income calculation. That is the entire reason the product exists.
Yes, and most investors do. Entity vesting is standard on DSCR and does not complicate the file. Bring your operating agreement and articles.
There is no cap. Fannie and Freddie stop at ten financed properties. DSCR lenders do not count them, so investors who have aged out of agency financing come here.
Several lenders will underwrite to short term income using documented history or a projection. Pricing is usually slightly higher than a long term lease and not every lender offers it, so it matters who the file goes to.
Usually. Property declines come from guidelines, and guidelines differ. Converted use, shared or limited parking, awkward ingress and egress, an odd parcel, a condition issue. One lender's hard no is another lender's documented exception. What it takes is written explanations that address the specific objection and someone willing to work the portfolio until the guidelines line up. I have closed files that four other lenders passed on for exactly these reasons. Send me the decline and what they said, and I will tell you whether it is placeable.
That is fine. The appraiser assigns market rent on the 1007 rent schedule and the ratio is built from that instead of a lease.
Yes. No US credit history and no social security number is a workable file with the right lender. Expect a larger down payment and a narrower set of options.
Yes, and it is one of the most common uses. You pull equity out of a rental you already own to buy the next one, without ever documenting personal income.
Usually yes, and that is the real tradeoff people miss. Most DSCR loans carry a prepay of three to five years. You can often buy it down or out, but it costs you in rate. If you plan to sell inside three years, say so up front and we will structure for it.
DSCR is long term, thirty year, permanent financing at far better pricing. Hard money is short term bridge money for a deal that cannot wait or a property that is not rentable yet. Different tools, and sometimes you use one then refinance into the other.
Often it does not. Because DSCR is a business purpose loan and most investors vest the property in an LLC, the mortgage frequently does not report to personal credit the way a conventional loan does. That keeps it off your personal debt to income ratio, which leaves room to qualify for something else. It is lender dependent and not guaranteed, so confirm it on your specific file rather than assuming. I have had it work exactly this way and it changed what the client could do next.
Yes, and this is where a lot of investors get stuck. Four units is the line where residential lending stops, so a lender set up for one to four has to decline a five or six unit building no matter how good the deal is. Nothing is wrong with the property, it just landed on the wrong desk. I place these with lenders who do five plus, where the underwriting looks at the building's operating numbers. If you have been told no because of unit count, that was a lender limitation and not a verdict on your deal.
I am licensed to originate in Alabama, Arizona, California, Colorado, Delaware, Hawaii, Kansas, Kentucky, Missouri, Montana, New Mexico, Tennessee, Texas, Virginia, Washington, and Wisconsin. Reach out and I will confirm what is available for your property.
Rate and fees depend on the ratio, your credit, the leverage, and the property. I will put the actual numbers in front of you in writing before you commit to anything, and I will show you what the other lenders quoted so you can see I shopped it.
Address and the rent is enough. I will tell you if it works, what it prices at, and if it does not work I will tell you that too.