A DSCR loan is a rental-property mortgage that qualifies on the property's income instead of yours. No W-2s, no tax returns, no debt-to-income calculation. Lenders look at one number first: the debt service coverage ratio, which is the property's rent divided by its mortgage payment. Below are the requirements most DSCR lenders use in 2026, what they mean in practice, and where there's room to work around them.
1. The DSCR ratio: 1.00× is the usual floor
DSCR = monthly rent ÷ monthly payment (principal, interest, taxes, insurance, and HOA if any). A ratio of 1.00× means rent exactly covers the payment; 1.25× means rent is 25% higher than the payment.
- 1.00× and up qualifies with most lenders and is the floor UniFi's core program uses.
- 1.20×–1.25× and up gets the best pricing and the highest leverage.
- Below 1.00× is possible with some lenders at lower LTV (often 65–70%) and a higher rate. It's called a "no-ratio" or "sub-1.0" DSCR loan.
Rent can be the actual lease or, on a purchase or vacant property, the market rent from the appraiser's rent schedule (Form 1007). If the lease is higher than market, most lenders use the lower of the two.
2. Credit score: 660 typical, 620 possible
Most DSCR programs start at a 660 FICO. Some go down to 620 with a rate adjustment and lower maximum LTV. Scores of 720+ open the best pricing tiers and the top LTV brackets. Lenders pull all three bureaus and use the middle score; with two borrowers, they typically use the lower middle score.
3. Down payment and LTV: 20–25% down
| Transaction | Typical max LTV | Minimum down / equity |
|---|---|---|
| Purchase | 80% | 20% |
| Rate/term refinance | 80% | 20% equity |
| Cash-out refinance | 75% | 25% equity |
| 2–4 units, or DSCR under 1.0 | 65–75% | 25–35% |
Down-payment funds have to be seasoned, usually 60 days in your account, or sourced from a documented gift or business account. Cash-out proceeds can be used for anything business-related, including the next down payment.
4. Reserves: 3–6 months of payments
After closing you'll need to show liquid reserves of 3 to 6 months of the property's full payment. Cash-out proceeds often count toward reserves. Investors with several financed properties may need reserves on each one, though many lenders cap this.
5. Eligible properties and borrowers
- 1–4 unit residential: single family, duplex, triplex, fourplex, condos, townhomes.
- Non-owner-occupied only. You can't live in the property.
- Vest in your own name or in an LLC; most investors use an LLC. The loan is still personally guaranteed.
- Short-term rentals qualify with many lenders, using a 12-month STR income history or a percentage of long-term market rent.
- Loan amounts generally start around $75,000. Rural properties, condotels, and properties over 4 units fall outside DSCR and into commercial programs.
6. What you don't need
No tax returns, W-2s, pay stubs, or employment verification. No debt-to-income ratio. What you do provide: a photo ID, two months of bank statements for down payment and reserves, the lease or rent schedule, insurance quote, and entity documents if closing in an LLC. First-time investors are accepted by most lenders, sometimes at slightly lower LTV.
A soft credit pull is enough to get preliminary terms. The hard pull happens once you decide to move forward.
Frequently asked questions
What DSCR ratio do I need to qualify?
Most lenders require at least 1.00×, meaning rent covers the full monthly payment. Ratios of 1.20× or higher earn better rates and higher leverage. Some programs allow ratios below 1.00× at a lower loan-to-value.
What credit score is required for a DSCR loan?
Typically 660 or higher. A few lenders go to 620 with a rate adjustment and lower maximum LTV. Scores above 720 get the best pricing.
How much do I need to put down?
20% on a purchase (80% LTV) for most programs. Cash-out refinances are capped around 75% LTV, and 2–4 unit properties or sub-1.0 DSCR deals may require 25–35% down.
Do DSCR loans require tax returns?
No. DSCR loans qualify on the property’s rental income, so tax returns, W-2s, and pay stubs are not required and no debt-to-income ratio is calculated.
Can I get a DSCR loan in an LLC?
Yes. Most investors close in an LLC. The loan is still personally guaranteed by the LLC members, and lenders will ask for the operating agreement and formation documents.
Can I use a DSCR loan for a short-term rental?
Many lenders allow it, using either a 12-month history of short-term rental income or a percentage of the appraiser’s long-term market rent. Not every program permits it, so mention it up front.
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