DSCR loan requirements: what lenders actually look at.

The property has to cover its payment

The first requirement is the property itself. Its rent, divided by the full monthly payment (principal, interest, taxes, insurance, and HOA dues), has to come in above 1.0. That ratio is the DSCR. Our guide on how to calculate DSCR walks through it.

The property has to be non-owner-occupied investment property. DSCR loans are business-purpose loans, so a home you plan to live in does not qualify.

Credit score

Minimums start around 640 to 660, and they vary by lender. Credit does not decide whether the property qualifies, but it moves the pricing. Stronger scores buy better terms on the same property.

Down payment and leverage

Plan on 25% down. Lenders typically go up to 75% of value on a purchase. Some will go to 80% on stronger files, but the rate takes a real hit, so we usually aim for 75%.

On a refinance, cash-out goes up to about 75% of value and rate-and-term up to about 80%. See DSCR cash-out refinance for the details.

Income documentation

None. No W-2s, pay stubs, or tax returns. That is why self-employed investors, people with heavy write-offs, and anyone past the conventional limit on financed properties use DSCR loans.

What lenders do want is two months of bank statements showing the down payment, closing costs, and reserves.

Entity and vesting

Nearly every DSCR file we place closes in an LLC or corporation. You will need the entity documents: articles, operating agreement, and EIN. If a rental is in your personal name today, a refinance is often a clean way to move it into an entity.

Loan size and term

Loans start from about $75,000, and minimums vary by lender. The standard term is a 30-year fixed. Prepayment options vary: if you plan to hold for a long time, a longer prepayment period usually buys a better rate, and if you may sell sooner, a shorter one is available at a higher rate.

From a complete file to closing, plan on about 30 to 35 days, appraisal and title permitting.