What a DSCR loan is
DSCR stands for debt service coverage ratio. For a rental property it compares the gross monthly rent to the full monthly housing payment: principal, interest, property taxes, insurance and any HOA dues (often abbreviated PITIA). A ratio above 1.00 means the rent covers the payment; below 1.00 means it does not.
Because the property’s income is the qualifying income, wholesale lenders offering DSCR programs typically do not ask for personal tax returns, W-2s or a debt-to-income calculation. They look instead at the rent (from a lease or an appraiser’s market rent estimate), the property’s value, your credit, your reserves and your experience.
Who DSCR loans tend to fit
DSCR financing is built for business-purpose real estate investing. It is commonly used by self-employed investors whose tax returns show heavy write-offs, by investors scaling past the point where personal income ratios become a bottleneck, and by anyone who simply prefers the property to stand on its own numbers.
- Long-term rentals: single-family, 2–4 unit, condos and townhomes
- Short-term and mid-term rentals, where the program allows it
- Purchases, cash-out refinances and rate-term refinances
- Properties held personally or in an LLC
Why there is no rate table on this page
A DSCR quote is assembled from a base price that moves with the capital markets, then adjusted up or down for each feature of your file. Two investors buying identical houses on the same day can receive meaningfully different pricing because one chose a five-year prepayment structure and the other chose none, or because one is at a lower loan-to-value.
Any single number published on a website would be wrong for most readers, and stale within days. Instead, we explain each adjustment so you understand the quote you receive, then shop your actual scenario with wholesale lenders.
What we do as your broker
DSCR Rates is a brand of Loan Daddy LLC, a licensed mortgage broker. We are not a lender and do not make loans. We arrange and shop financing from wholesale lenders, compare how each one prices your specific combination of factors, and walk you through the trade-offs before you lock.
Business-purpose only
DSCR loans arranged through us are for non-owner-occupied investment property only. If you or a family member will live in the property, even part of the year, it is not a fit for this product and we will tell you so up front.
Factors that weigh most on this loan
| Factor | Why it matters here |
|---|---|
| DSCR ratio | Higher coverage usually earns better pricing tiers. |
| Loan-to-value | More equity is one of the strongest pricing levers. |
| Credit score | Priced in bands; crossing a band edge can matter. |
| Prepayment penalty | A longer prepay can improve pricing. |
Common questions
Do DSCR loans require tax returns?
Typically no. DSCR programs qualify the property on rental income instead of your personal income, so personal tax returns and W-2s are usually not part of the file. Expect to document assets, reserves, credit and the property itself.
Can I close a DSCR loan in an LLC?
Many wholesale lenders allow vesting in an LLC or other entity, usually with a personal guarantee. We confirm entity requirements for each lender we shop.
Can I use a DSCR loan for a home I will live in?
No. These are business-purpose loans for non-owner-occupied investment property only.