What is DSCR?
DSCR stands for Debt Service Coverage Ratio. In simple terms, it compares qualifying rental income with the property's qualifying monthly housing payment.
Who commonly uses DSCR financing?
Buy-and-hold investors
Investors purchasing rental property for long-term ownership.
BRRRR investors
Investors refinancing out of short-term rehab financing after the property is repaired and stabilized.
Portfolio builders
Investors who want an investment-property program that is not structured like a traditional owner-occupied mortgage.
Rental refinances
Rate/term or cash-out opportunities may be available depending on lender guidelines and the transaction.
What lenders typically evaluate
- Property type and value.
- Qualifying current or market rent.
- The property's DSCR.
- Requested loan amount and leverage.
- Borrower credit, liquidity, experience, entity structure, and reserves as required by the lender.
- Purchase or refinance details.
Common structures
Programs may include long-term fixed-rate, adjustable-rate, and interest-only structures. Exact DSCR minimums, leverage, rates, prepayment terms, and documentation requirements vary by lender.
Where DSCR fits with Hard Money
An investor may use short-term financing to purchase and rehab a property, then refinance into a longer-term rental loan once the property is ready to hold.
Want us to look at a possible fit?
Submit the property, financing need, timeline, and basic deal information. Program terms and approval are determined by the selected third-party lender and the specific transaction.
Submit a Deal for ReviewEducational information only. Loan programs, leverage, rates, documentation, property eligibility, and closing timelines vary by lender and transaction. Deal Support Network does not provide legal, tax, investment, or financial advice.