Why DSCR loans exist
Conventional rental loans count rent at 75% AND require personal DTI to qualify. Self-employed investors with strong rentals but messy tax returns get squeezed out. DSCR loans qualify the property, not the borrower — no W2s, no tax returns, no DTI. The tradeoff is rate (+0.75–1.25%) and down payment (20–25% minimum).
The 'no-ratio' trap
Some lenders offer 'no-ratio' DSCR loans (DSCR < 1.0 allowed). Pricing is brutal — often +2% over standard DSCR. Use only as a bridge while you raise rents; refi out when DSCR clears 1.20.
Short-term rental DSCR
Most DSCR lenders now accept AirDNA/PriceLabs market-rent estimates for STRs. You'll need 12 months of host history OR a third-party market analysis. Underwriting haircuts the STR rent 10–20% vs. comparable long-term rent.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
Do DSCR loans show on my personal credit?
Most are titled in an LLC and don't report to personal credit — but you typically sign a personal guarantee. The loan is recourse to you even if not on the credit bureaus.
Can I cash-out refi with DSCR?
Yes. Most lenders allow 75% LTV cash-out as long as DSCR clears 1.0–1.20 on the new payment. Excellent tool for the 'R' in BRRRR.
Are DSCR loans 30-year fixed?
Available in 30-yr fixed and 5/1, 7/1, 10/1 ARMs. ARM pricing runs 0.25–0.5% below the fixed; choose based on hold horizon.
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Last reviewed
June 2026. We re-check every figure on the platform on a rolling quarterly cycle.
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