What is a DSCR loan and how do investors qualify?
A DSCR (Debt-Service Coverage Ratio) loan qualifies you on the rental income of the property rather than your personal income — no tax returns or pay stubs needed. It's ideal for buying rental property and growing a portfolio. As a broker I also finance two-unit purchases with as little as 5% down for owner-occupants.
Key takeaways
Real estate is the best investment you can make, and I love helping clients build a portfolio. With a DSCR loan, you qualify based on the rental income the property produces — not your personal income documentation. I've helped clients buy two-units, house-hack their first home, and add additional investment properties as their income stream grows.
Build wealth through real estate
While you pay your mortgage you're building equity — that's why real estate is such a powerful investment. I help clients at every stage, from their first house-hack to a growing portfolio, and the financing you choose makes all the difference in how fast you can scale.
What is a DSCR loan?
A DSCR (Debt-Service Coverage Ratio) loan is a non-QM product that qualifies you on the rental income of the property, not your personal income. No tax returns, no pay stubs — the deal stands on the property's own numbers. It's the cleanest way to keep buying investment property without your personal debt-to-income getting in the way.
The math is simple:
DSCR = the property's monthly rent ÷ its monthly payment (principal, interest, taxes, insurance, and any HOA).
A ratio of 1.0 means the rent exactly covers the payment; lenders generally want 1.0 or higher. Example: $3,000 in rent against a $2,400 payment is a 1.25 DSCR — comfortably qualifying.
DSCR vs. a conventional investment loan
| DSCR loan | Conventional investment loan | |
|---|---|---|
| Income documentation | None — uses rental income | Full personal income + tax returns |
| Counts against your DTI | No | Yes |
| Down payment | 20–25% | 15–25% |
| Can close in an LLC | Yes | Usually no |
| Number of properties | Generally unlimited | Capped by guidelines |
What you'll need
- 20%–25% down on a pure investment property
- A credit score around 620–640 or higher
- Typically 3–6 months of payment reserves in the bank
Rates run a bit higher than conventional to offset the lender's risk — that's the trade for not documenting personal income. And the one firm rule: DSCR is for investment properties only. You can't live in it.
Owner-occupied multi-family: the house-hack
If you want to live in one unit and rent the other, a conventional loan lets you buy a two-unit with as little as 5% down. One of my clients immigrated here, became a citizen, bought a two-family, and now has rental income helping cover his mortgage — and he's already eyeing his next property.
Why a broker matters for investors
Investor financing lives largely in the non-QM world, and I have lenders for scenarios most banks turn away. Whatever your strategy — first rental or fifteenth — let's map out the financing so each property moves you toward your goals.
Frequently asked questions
How does a DSCR loan work?
It qualifies the loan on the property's cash flow instead of your personal income. The lender divides the monthly rent by the monthly payment (principal, interest, taxes, insurance, and HOA) to get the DSCR — and generally wants 1.0 or higher, meaning the rent at least covers the payment. A $3,000 rent against a $2,400 payment is a 1.25 ratio, which qualifies comfortably. No tax returns or pay stubs required.
Do DSCR loans require 20% down?
Usually 20% to 25% down on a pure investment property — that's standard for DSCR and most investor financing. If you're willing to live in one unit of a two-to-four-unit building, you can drop to as little as 5% down with a conventional loan instead. I'll lay out both so you can see which gets you there faster.
What is the downside of a DSCR loan?
Three things to know: rates run a bit higher than a conventional loan (the tradeoff for not documenting personal income), you'll typically need 20%–25% down plus a few months of reserves, and you can't live in the property — it's investment-only. For investors who want to keep buying without their personal debt-to-income getting in the way, those tradeoffs are usually well worth it.
Can I live in a property financed with a DSCR loan?
No — DSCR loans are for investment properties only, since they qualify on rental income. If you want to live in one unit and rent out the others, that's a great strategy, but we'd use a conventional owner-occupied loan (as little as 5% down on a two-unit) rather than DSCR.
Do I need to show my personal income for a DSCR loan?
No. A DSCR loan qualifies on the rental income the property generates, so you don't provide personal tax returns or pay stubs. It's the go-to product for investors who want to keep buying without their personal debt-to-income capping how much they can borrow.
How much down payment do I need for an investment property in New Hampshire?
For a pure investment property — one you won't live in — plan on roughly 20% to 25% down, whether you use a DSCR loan or conventional financing. If you're willing to live in one unit of a two-to-four-unit building, you can get in for as little as 5% down and let the rent help cover the mortgage. I'll lay out both paths so you can see which builds your portfolio faster.