DSCR Loans: Rental Property Financing Without Tax Returns

A DSCR loan qualifies your investment property on the rent it earns instead of your personal income. No tax returns, W-2s or pay stubs. Close in your LLC, finance long-term or short-term rentals, and pull cash out to buy the next one. Tribune Funding compares DSCR programs across lenders so you get the leverage, rate and prepayment terms that fit your plan.

Get My Loan OptionsBook a Consultation

DSCR Loan Programs

How DSCR Qualification Works

DSCR = monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance and HOA dues). Most lenders approve at 1.0 and give their best pricing at 1.20 to 1.25 or higher.

Example: rent of $3,000 and PITIA of $2,546 produce a DSCR of 1.18. Choosing an interest-only payment lowers PITIA to $2,300 and lifts DSCR to 1.30. Test your property in the commercial loan calculator or the interest-only calculator.

Typical DSCR Loan Terms

Term	Typical range
Minimum DSCR	1.0 (0.75 or no ratio with some programs)
Credit score	620 minimum; 680 to 720+ for best pricing
Purchase LTV	Up to 75% to 80%
Cash-out LTV	Up to 70% to 75%
Loan amount	About $75,000 to $3 million+
Loan options	30-year fixed, 40-year with IO, 5/6 and 7/6 ARMs, interest-only
Prepayment penalty	Commonly 3 to 5 years step-down; buyout options available
Reserves	3 to 12 months of PITIA
Closing time	About 21 to 30 days

Who DSCR Loans Are For

• Self-employed investors whose tax returns show heavy write-offs
• Investors who have hit the 10-property limit on conventional loans
• Buyers closing in an LLC or other entity
• Short-term rental owners
• BRRRR investors refinancing out of hard money
• Foreign nationals (selected programs, larger down payment)

DSCR loans are for investment property only. You cannot live in a property financed with a DSCR loan.

DSCR vs. Conventional Investor Loans

	DSCR	Conventional
Qualifies on	Property rent	Your income and debt-to-income ratio
Tax returns	Not required	Required
LLC borrower	Yes	Generally no
Financed property limit	No agency cap	10 properties
Rate	Higher	Lower

What You Will Need

• Purchase contract or current mortgage statement
• Lease or rental history (booking history for short-term rentals)
• Two months of bank statements for down payment and reserves
• LLC documents if closing in an entity
• Insurance quote

How It Works

1. Send the property details: address, price or value, rent and your credit range.
2. Compare DSCR quotes: rate, LTV, prepayment structure and closing costs across lenders.
3. Appraisal with rent schedule sets the value and market rent.
4. Close, typically in 3 to 4 weeks.

Eligible Property Types

Property	Notes
Single-family homes and townhomes	Widest lender choice and best pricing
2 to 4 unit properties	Rent from all units counts toward DSCR
Warrantable condos	Similar to single-family
Non-warrantable condos and condotels	Fewer lenders, lower leverage
Short-term and vacation rentals	Booking history or projections; often 75% to 80% max LTV
5 to 10 unit and mixed-use	Small balance commercial DSCR using NOI
Rural property	Case by case; lower leverage

Why DSCR Loans Get Declined, and the Fix

Problem	Fix
Ratio below 1.0 after the appraisal	Larger down payment, interest-only option, rate buydown, or a no-ratio program
Appraised rent lower than the lease	Provide the signed lease and proof of receipt; some lenders use the lease when it is higher
Insurance or taxes higher than expected	Shop insurance early; budget for reassessed taxes after purchase
Not enough reserves	Count cash-out proceeds where allowed, or reduce the loan
Owned less than 6 months (cash-out)	Use purchase price plus improvements, or a lender with shorter seasoning
Credit below the program minimum	Lower leverage, or rapid rescore after paying down revolving balances

Choosing a Prepayment Penalty

Most DSCR loans include a step-down prepayment penalty, such as 5-4-3-2-1 (5% of the balance in year one, falling 1% each year). A longer penalty usually buys a lower rate. If you may sell or refinance within two to three years, a shorter penalty or a buyout often costs less overall.

DSCR Loan Guides

Frequently Asked Questions

What is a DSCR loan?

A business-purpose mortgage for investment property that qualifies on the property’s rental income divided by its monthly payment, instead of the borrower’s personal income.

What DSCR do I need to qualify?

Most programs require 1.0 or higher, with the best pricing at 1.20 to 1.25+. Some programs accept 0.75 or no ratio with lower leverage.

What are DSCR loan rates in 2026?

Typical quotes have run from about 6% for the strongest files to 8% or more, depending on DSCR, LTV, credit, loan size and prepayment terms.

Can I get a DSCR loan in an LLC?

Yes. DSCR loans routinely close in an LLC, with members owning 25% or more usually signing a personal guarantee.

How much do I need to put down on a DSCR loan?

Usually 20% to 25% on a purchase. Short-term rentals, lower credit scores and sub-1.0 DSCR programs may require more.