Debt Service Coverage Ratios Loans (DSCR)

DSCR & Bank Statement Loans: Simplify Your Investment Financing

For real estate investors, traditional mortgages often create hurdles. Non-Qualified Mortgage (Non-QM) loans, specifically DSCR (Debt Service Coverage Ratio) and Bank Statement programs, offer a flexible solution designed to match your real-world income and investment strategy.

What is a DSCR Loan?

The DSCR loan is an investor favorite because it allows the rental property to qualify itself. It completely shifts the focus from your personal income to the property’s ability to generate cash.

• DSCR is a financial ratio that compares a property's rental income to its monthly mortgage debt (Principal, Interest, Taxes, Insurance, HOA).
• The Rule: If the property’s income covers its expenses (typically a DSCR ratio of 1.0 or higher), you qualify.
• The Benefit: You can secure financing for investment properties without providing W-2s or tax returns.

Key Benefits That Simplify Your Investment

Stop the paper chase. Our Non-QM options are designed to streamline the buying process and help you scale your portfolio faster.

• Minimal Documentation: Forget providing years of personal tax returns or pay stubs. Qualification is based on the property's lease/market rent (DSCR) or your business deposits (Bank Statement).
• Focus on Property Cash Flow: Use the expected rental income from the new investment property to secure the loan, making it easier to qualify for your next purchase.
• Higher Loan Potential: By focusing on the income-generating ability of the asset, investors may be able to secure higher loan amounts than they would with conventional limits.
• Flexible Property Types: Finance a wide range of investments, including Single-Family Residences (SFRs), 2-4 Unit Multi-family, Condos, and more.
• Shorter Qualification Time: The simplified focus on key financial data often leads to a faster, smoother closing process.
• No Limit on Properties: Unlike conventional loans (Fannie/Freddie), Non-QM programs allow seasoned investors to finance unlimited investment properties.

Understand the DSCR Qualification

While flexible, the DSCR loan still requires due diligence.

• Minimum DSCR Ratio: Lenders typically require a minimum DSCR, often 1.0 or higher, meaning the rent must fully cover the debt obligations.
• Sub-1.0 Ratios: Some programs may allow a DSCR below 1.0 (e.g., 0.75), but these usually require a larger down payment or come with higher interest rates.

Ready to leverage your rental property's potential and expand your portfolio? Speak with a Non-QM mortgage professional today to review your investment strategy and find the perfect financing solution.