Does your rental property qualify? Calculate your debt service coverage ratio.
Monthly PITIA Breakdown
Your DSCR Ratio
1.20
Monthly cash flow
+$465
Estimated rate
7.75%
Rent for 1.0 DSCR
$2,335
Rent for 1.25 DSCR
$2,919
DSCR Scale
Rate by DSCR Tier
Your Property Qualifies
With a 1.20 DSCR, you qualify for a DSCR loan at an estimated 7.75% rate. No personal income verification needed.
DSCR pricing depends on the property, the rents and the lender — this is an estimate. Today’s rates →
Altgage Inc. NMLS #2447252 | 100 Cambridge St, Floor 14, Boston, MA 02114|A DSCR (Debt Service Coverage Ratio) loan qualifies you based on the property's rental income — not your personal income or DTI. It's how serious investors scale a portfolio past the 10-property limit on conventional financing, and how self-employed buyers with thin tax returns still get investment loans. The trade-off is rate: typically 0.75–1.5% higher than conventional.
Monthly rent ÷ monthly PITI = the DSCR. A 1.25 DSCR means rent covers 125% of the mortgage payment. Most lenders want 1.20+ for best pricing; some go down to 1.00 (rent exactly covers payment) at a rate premium; sub-1.00 "no-ratio" products exist but get expensive.
Investors past Fannie's 10-property cap. Self-employed buyers whose tax returns understate income (write-offs are great for taxes, terrible for DTI underwriting). Anyone who doesn't want a personal income deep-dive. LLCs buying property — DSCR is one of the few products that lends to an LLC instead of an individual.
Rates ~0.75–1.5% higher. 20–25% down minimum (vs 15% conventional investment). Reserves usually 6 months PITI in the bank. Pre-payment penalties are common (uncommon on conventional). Most DSCR lenders cap at 80% LTV.
If your W-2 income easily covers the loan and you're under the 10-property cap, conventional is cheaper. If you're cash-out refinancing a property where the rent barely covers payment, DSCR won't work — you need the DTI path. Don't default to DSCR just because the application is simpler.
Altgage originates DSCR loans in Texas, Florida, California, Colorado, Massachusetts and Georgia. Texas and Florida are the two highest-volume DSCR markets in the country, and both have quirks worth knowing before you write an offer — Texas homestead rules don’t apply to investment property but its title and closing costs run high, and Florida’s insurance market has become a material line item in the DSCR calculation rather than a rounding error. If a property’s DSCR is marginal, insurance is usually the first place to look for room.
DSCR underwriting looks at the property, not you. That changes the checklist substantially.
The ratio. Rent divided by PITI. Most lenders price best at 1.20 and above, will lend at 1.00 with a rate premium, and offer sub-1.00 “no-ratio” products at a meaningful cost. Which rent figure they use matters — an appraiser’s market-rent schedule can differ from your signed lease, and lenders differ in which one governs.
Down payment. 20–25% minimum on a purchase, against 15% for a conventional investment loan. Most lenders cap at 80% LTV.
Credit. 640 is a common floor, 680–700 is where pricing improves, and 740+ gets the best rates on offer. Credit still matters here even though income doesn’t.
Reserves. Typically six months of PITI in verifiable accounts, sometimes more on multiple financed properties.
Entity and property type. DSCR is one of the few residential products that lends to an LLC rather than an individual. Single-family, 2–4 unit, condo and short-term rental all qualify with most lenders, though short-term rental income is underwritten more conservatively.
What you won’t provide: tax returns, W-2s, pay stubs, or a debt-to-income calculation. That’s the entire point of the product.
DSCR rates typically run 0.75–1.5% above a comparable conventional investment loan. That spread is the price of skipping income documentation, and four things move you inside it.
The ratio itself. The gap between a 1.00 DSCR and a 1.25 DSCR is real money over thirty years. If you’re close to a threshold, a slightly larger down payment that lifts the ratio can cost less than the rate premium it avoids.
LTV. 65% prices better than 80%, and the step-downs are usually at 70% and 75%.
Credit score, in bands, the same way conventional pricing works.
Prepayment penalty structure. This one is a genuine choice rather than a constraint. DSCR loans commonly carry a prepay penalty — often a step-down over three to five years — and accepting a longer penalty period buys a lower rate. If you’re holding the property long-term that’s close to free money. If you might sell or refinance inside three years, it isn’t, and this is the term to negotiate hardest.
We don’t publish a rate sheet here because DSCR pricing moves with the ratio, the LTV, the property type and the penalty structure together, and any single number would be wrong for most readers. The calculator above uses current market assumptions; a scenario-specific quote needs a conversation.
A DSCR loan qualifies you on the property’s rental income rather than your personal income. The lender divides expected monthly rent by the monthly mortgage payment including taxes and insurance — the debt service coverage ratio — and lends against that number, with no tax returns, W-2s, or debt-to-income calculation.
Monthly rent divided by monthly PITI — principal, interest, taxes and insurance, plus HOA where it applies. A property renting for $2,500 with a $2,000 PITI has a DSCR of 1.25, meaning rent covers 125% of the payment. Most lenders want 1.20 or higher for their best pricing.
1.20 or above gets the best pricing with most lenders. Many will lend at 1.00, where rent exactly covers the payment, at a higher rate, and some offer no-ratio products below 1.00 at a further premium. Below 1.20, the rate premium often costs more than raising the ratio with a larger down payment would.
There’s no cap in the way conventional financing caps you at ten financed properties. Because DSCR underwriting evaluates each property on its own cash flow rather than your personal debt-to-income, investors routinely hold far more. Individual lenders set their own exposure limits, so a large portfolio usually means working with more than one.
Usually not, when the loan is made to an LLC as a business-purpose loan — most DSCR lenders don’t report those to personal credit bureaus. That’s part of why investors use them to scale. Reporting practices vary by lender, so confirm it directly if keeping the debt off your personal report matters to your plan.
No. DSCR loans are non-QM products, held by portfolio lenders or sold into private securitizations rather than to Fannie Mae or Freddie Mac. That’s why the rates run higher, the down payments are larger, and prepayment penalties are common — none of which apply on the conventional side.
Yes, into another DSCR loan or into conventional financing if you later qualify on personal income. The thing to check first is the prepayment penalty on your existing loan — many DSCR loans carry a step-down penalty over the first three to five years, and refinancing inside that window can cost more than the rate improvement is worth.
Yes, and it’s one of the main reasons investors use them. DSCR is among the few residential loan products routinely written to an LLC rather than an individual, which keeps title and liability inside the entity. Most lenders will still ask for a personal guarantee from the members.