Debt Service Coverage Ratio (DSCR) loans are specifically designed for real estate investors purchasing or refinancing investment properties. Unlike traditional mortgages that focus on personal income and employment, DSCR loans qualify borrowers based solely on the property's rental income potential.
No tax returns, W-2s, or pay stubs required. Qualify based solely on property cash flow.
No limit on the number of financed properties. Perfect for scaling your investment portfolio.
APM's DSCR loan allows vesting in an LLC or other business entity for liability protection.
Streamlined process with fewer documents means faster closings.
Non-warrantable condos, condotels, manufactured homes, and multifamily (up to 4 units).
Up to 85% loan-to-value with no private mortgage insurance required.
DSCR loans work by evaluating the property's ability to generate income rather than the borrower's personal income. The Debt Service Coverage Ratio is calculated by dividing the property's monthly rental income by its monthly debt obligations (mortgage payment, property taxes, insurance, and HOA fees). A DSCR of 1.0 means the property breaks even, while a ratio above 1.0 indicates positive cash flow. Most lenders prefer a DSCR of 1.25 or higher, meaning the property generates 25% more income than its expenses. This approach allows real estate investors to expand their portfolios without being limited by personal income documentation, making it ideal for those with multiple properties or complex tax returns.
Investors with multiple rental properties who want to qualify based on property cash flow rather than personal income.
Business owners and entrepreneurs who write off significant expenses, making traditional income verification challenging.
Professionals with substantial income but complicated tax situations that don't reflect true earning power.
Investors looking to scale their portfolio beyond conventional loan limits without personal income restrictions.
Get answers to common questions about dscr loans.
Q Home Loans specializes in dscr loans for homebuyers and investors in Washington. Get expert guidance and competitive rates.