DSCR Loan Requirements
Published: 2025-02-01 · Last updated: 2025-03-01
Qualifying for a DSCR loan depends on the property’s cash flow, your credit, and your down payment—not your personal income. Here’s what lenders typically look at when you apply for an investment property loan.
Credit Score
Most DSCR programs require a minimum credit score, often in the mid-600s or higher. A stronger score can improve your rate and terms. Because the loan is secured by the property and its rental income, some lenders are more flexible on credit than on traditional mortgages, but requirements vary by product and lender.
Down Payment
Down payment requirements for DSCR loans typically range from about 20% to 25%, depending on the number of units, property type, and the lender’s guidelines. More equity in the property reduces the lender’s risk and can support a better debt service coverage ratio.
Property Type and Rental Income
The property must be an income-producing rental—single-family, multi-family, condos, or townhomes. Lenders use either actual lease income or projected market rent to calculate the DSCR. Short-term rental (STR) income, such as from Airbnb, may be considered by some lenders, including RBJ Lending, using historical or projected STR data.
DSCR Ratio
Lenders typically require a minimum DSCR (e.g., 1.0 or 1.25), meaning the property’s net income must cover the mortgage payment by that multiple. No personal income verification is needed; the focus is on the property’s ability to support the debt. Meeting these DSCR loan requirements is the main path to approval for real estate investors.