DSCR loans: buy rentals while you keep driving

Is this you?

• You want rental income that keeps coming when you park the truck for good
• You already own your home and want a first or next investment property
• Your personal income is hard to document but the property's numbers are strong
• You want to buy in an LLC (many DSCR lenders allow it)

How qualifying works

DSCR stands for debt service coverage ratio. The lender divides the property's monthly rent (from a lease or an appraiser's market rent estimate) by its full monthly housing cost: principal, interest, taxes, insurance, and any HOA dues.

A ratio of 1.00 means the rent covers the cost exactly. Rent 20% higher than the cost is a 1.20. Many lenders want 1.00 or better, and some programs allow lower ratios with stronger credit or a larger down payment.

Because the property qualifies itself, you typically don't provide tax returns, pay stubs, or bank statement income calculations. Lenders still check your credit, your reserves, and the property.

How the ratio works

Rent equals the full monthly housing cost	DSCR 1.00
Rent is 20% higher than the housing cost	DSCR 1.20
Rent is 10% lower than the housing cost	DSCR 0.90

Illustration of the ratio only. Minimum DSCR, credit, and reserve requirements vary by lender and loan amount.

What you'll typically need

• A lease or the appraiser's market rent estimate
• Credit report and photo ID
• Asset statements for down payment and reserves
• LLC documents if you're buying in an entity
• Property insurance quote

Typical guidelines

Every lender sets its own rules. These are common patterns, not promises, and they change. We match your file to the lender whose guidelines fit it best.

• Investment properties only (not your primary home)
• Credit: many programs start around 620 to 660
• DSCR: often 1.00 or higher, some programs go lower
• Reserves: commonly several months of the property's housing costs
• Property: single family, 2 to 4 units, condos, townhomes, and some short-term rentals

DSCR Rental Loans: common questions

Non-QM programs are not available in all states and are subject to credit approval, income and asset verification, and appraisal. Guidelines shown are typical illustrations and vary by lender. This is not a commitment to lend. Matador Lending, NMLS #2072896. Equal Housing Opportunity.