DSCR loans: financed on the property's income, not yours
From New Haven three-families to single-family rentals statewide, DSCR financing qualifies the loan on the property's rental income rather than your personal tax returns — no employment verification, and LLC closings are welcome.
Who it fits
Buy-and-hold investors
Investors building a rental portfolio who don't want their personal income on the file.
LLC purchasers
Buyers who want to hold title in an LLC or other business entity for liability protection.
Self-employed investors
Borrowers whose personal tax returns don't reflect their true borrowing capacity.
What DSCR actually measures
DSCR = the property's monthly rent divided by its total housing payment (principal, interest, taxes, insurance, and association dues).
| Scenario | Monthly rent | Total housing payment | DSCR |
|---|---|---|---|
| Cash-flowing | $2,800 | $2,300 | 1.22 |
| Break-even | $2,300 | $2,300 | 1.00 |
| Negative leverage | $2,000 | $2,300 | 0.87 |
Illustration only. Most DSCR programs look for a ratio of 1.0 or higher, though some allow lower ratios with a larger down payment or reserves.
Where DSCR helps
- No personal income or employment verification
- Qualifies on the property's cash flow
- LLC and entity closings welcome
- Scales with a growing rental portfolio, unlike conventional caps
What to weigh
- Typically requires 20-25% down
- Rates run higher than owner-occupied financing
- Property needs to support the required DSCR ratio
- Not available for primary residences
Common questions
What is a DSCR ratio?
Debt Service Coverage Ratio — the property's monthly rental income divided by its total housing payment. A ratio above 1.0 means the property covers its own payment.
Can I close in an LLC?
Yes — DSCR loans are commonly used with LLC and other entity closings, which is one of the main reasons investors choose them.
Do I need a minimum DSCR ratio?
Most programs look for 1.0 or higher, though some allow lower ratios with additional down payment or reserves.
How many rental properties can I finance?
DSCR loans don't carry the same property-count caps as conventional financing, which makes them common for growing portfolios.
See what your rental property qualifies for
No cost, no obligation — we'll run the DSCR math on your scenario.