DSCR Loans
A DSCR (Debt Service Coverage Ratio) loan is designed for real estate investors and qualifies you based on the income a property produces rather than your personal income. Instead of tax returns, W-2s, or pay stubs, the lender compares the property's expected rental income to its monthly payment. This makes it a strong option for investors who want to grow a portfolio without the paperwork of a traditional loan.
The DSCR is calculated by dividing the property's gross rental income by its total monthly payment, including principal, interest, taxes, insurance, and any association dues. A ratio of 1.0 means the rent fully covers the payment, and many lenders look for a ratio at or above that level, though some allow lower ratios with a larger down payment.
DSCR Loan Characteristics
Qualification is based on the property's rental income, not your personal income
No tax returns, W-2s, or employment verification required
Designed for non-owner-occupied investment and rental properties
Often allows the property to be held in an LLC
Typically requires a larger down payment and a higher credit score than a conventional loan
Rates are usually somewhat higher to reflect the added risk
Many lenders place no limit on the number of financed properties, which helps investors scale
Faster, simpler underwriting because personal income paperwork is not required
5) Conventional loans offer options for fixed or adjustable interest rates
6) Conventional loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
7) Conventional loans do not require mortgage insurance if the borrower puts down at least 20% of the purchase price
8) Conventional loans offer options for refinancing, including cash-out refinancing and rate-and-term refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.
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This is not an offer to enter into an agreement. This is not a commitment to make a loan. Not all customers will qualify. Information, rates and programs are subject to change without prior notice. All products are subject to credit and property approval. All approvals are subject to underwriting guidelines. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit standards, and property limits. NEXA Mortgage, LLC is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency. Copyright © 2026 NEXA Mortgage, LLC NMLS#1660690. AZBK #2006218. 5559 S Sossaman Rd Bldg #1 Ste #101 Mesa, AZ 85212, 602-344-9333. www.NEXALending.com NEXA Mortgage, LLC is an Equal Housing Lender | Equal Housing Opportunity. All rights reserved.