DSCR loans: a mortgage read through the property.
DSCR loans are evaluated on eligible rental income and the strength of the file, not your personal tax returns.
The file starts with the income the property can support.
The desk underwrites the whole file, not just the ratio.
We match the file to the right DSCR program.
In short
Key takeaways
- DSCR = monthly rent ÷ PITIA. A ratio of 1.0 means the rent exactly covers the payment; 1.25 or higher typically earns the better pricing tiers.
- Expect 20 to 25% down as of mid-2026. Ratios below 1.0 are financeable, but at lower LTV and tougher terms.
- You can close in an LLC, and there is no personal DTI calculation. A personal guaranty from the owners is still standard.
- Prepayment penalties are normal on DSCR loans because they are business-purpose. The structure is negotiable and it changes your pricing.
Written and reviewed by the Intel Loans, Inc. lending team · NMLS #2858705Updated July 2026
What this desk looks at
A profitable investor with four properties and an aggressive CPA can look broke on a tax return. This desk never opens it.
Eligible rental income, stability, and the expense picture.
Single-family, multifamily, mixed use, and some condotels.
Credit, landlord experience, and reserves set the tier.
The lease or the appraiser's rent schedule sets the income number.
The requirements
DSCR loan requirements: the full matrix, desk by desk
There is no agency rulebook here. Every non-QM lender sets its own matrix, which is exactly why a broker who can shop the desks earns their keep. These are the ranges we see across our wholesale lending partners as of mid-2026.
| Criterion | Typical range | What moves it |
|---|---|---|
| Minimum DSCR | 1.0, with stronger pricing tiers at 1.25+ | Sub-1.0 and no-ratio programs exist at reduced LTV |
| Down payment | 20% to 25% | Lower ratios, condotels, and cash-out push it higher |
| Credit score | 660 to 680 floors are common; 700+ widens options | Score sets the LTV ceiling and pricing tier |
| Reserves | 3 to 6 months of PITIA | More for portfolios, cash-out, or DSCR below 1.0 |
| Income documentation | None of yours. Lease or appraiser's rent schedule only | No tax returns, W-2s, paystubs, or employment call |
| DTI calculation | Not performed | The property's ratio replaces your debt-to-income math |
| Vesting | Individual or entity (LLC, corporation, some trusts) | Personal guaranty from the members is standard |
| Property types | 1-4 unit residential, condos, townhomes, some condotels | Non-warrantable buildings route to condo-specific programs |
| Occupancy | Investment only, business purpose | You cannot live in the property, ever |
| Prepayment penalty | Usually present; structure is a pricing choice | See the stepdown section below |
The math
How lenders calculate DSCR, to the dollar.
The income side is the property’s gross monthly rent. For a leased property, that is the lease amount, usually capped at the appraiser’s market-rent opinion. For a vacant property, the appraiser’s rent schedule (Form 1007 on single-family homes) sets the number by itself.
The expense side is PITIA: principal and interest on the new loan, property taxes, insurance, and any HOA dues. Note what is not in there: vacancy, maintenance, management, utilities. DSCR is a lending ratio, not a cash-flow projection, and a property at exactly 1.0 is not actually break-even once real operating costs show up. Underwrite your own deal harder than the lender does.
In coastal markets, the line item that wrecks ratios is insurance. Wind coverage on a Florida or Gulf Coast rental can run several hundred dollars a month, and it sits inside PITIA dragging the ratio down. Price the policy before you price the loan; our insurance guide shows how lenders read it.
A Tampa duplex at 1.25
Hypothetical example for illustration only, not a quote or an offer. Purchase price $410,000 with 25% down ($102,500), loan amount $307,500. The appraiser’s rent schedule supports $1,900 per unit, so $3,800 of monthly rent.
At 1.25 this file sits in the stronger pricing tiers. If insurance came in $400 higher, the ratio falls to 1.10 and the pricing tier moves with it. Same house, different deal.
Pricing mechanics
How DSCR loans are priced, without the mystery
We won’t print rate figures here, because any number would be stale by the time you read it and advertising a rate that may not exist at closing is misleading, so we don’t. What we can do is show you the machine, because DSCR pricing is unusually mechanical. Each lender publishes a grid, and your terms come from where you land on three axes:
- The ratio tier. Files at 1.25+ price in the best band. Between 1.0 and 1.25 sits a middle band. Below 1.0 you pay meaningfully more and the LTV ceiling drops.
- Loan-to-value and credit. The grid rewards 65 to 70% LTV and 740+ credit, and charges for every step toward 80% LTV or a 660 score. These adjustments stack.
- The prepayment structure you choose. A longer, stiffer penalty means the lender keeps the loan longer, so they pay you for it with better terms. Buying the penalty down to zero is allowed on most programs and costs the most.
Because every desk weights these axes differently, the same file can price noticeably apart from one lender to the next. That spread is the argument for shopping the file, which is the job we do across our wholesale lending partners.
Prepayment penalties: the 3-2-1 stepdown, explained straight
Most DSCR loans carry a prepayment penalty, and Florida permits them on business-purpose loans like these. The common structure is a stepdown. A 3-2-1 means: pay the loan off in year one and the charge is 3% of the balance, year two is 2%, year three is 1%, and after that nothing. A 5-4-3-2-1 stretches the same idea over five years for better pricing today.
Why do these exist? Investor loans get refinanced fast, and a lender who expects to lose the loan in eighteen months prices that risk in. The penalty is you selling them certainty. That is a real trade, so make it deliberately: if you plan to hold and let the rent season, a five-year stepdown is cheap money. If this is a stabilize-and-refinance play, pay for the shorter penalty or the buyout up front, because a 2% penalty on a $300,000 balance is $6,000 of very real money on the way out.
Most desks let you choose the structure at lock. Selling the property usually triggers the same penalty as refinancing, and a few programs waive it on bona fide arm’s-length sales. Read the note. We’ll read it with you.
Short-term rentals
Airbnb and vacation rentals can qualify
Plenty of DSCR programs now underwrite short-term rental income, which matters in coastal and vacation markets. Two paths are common as of mid-2026. For a property with an operating history, lenders average 12 months of actual receipts from the platform statements. For a purchase without history, some desks accept a market-data projection from services like AirDNA, usually with a haircut applied and a lower LTV cap.
Expect stricter terms than a long-term rental: bigger down payment, higher ratio requirement, and questions about local licensing. Condotels and buildings with rental desks are their own category with a smaller lender pool; if that’s your building, start from our non-warrantable condo guide. For the full short-term-rental underwrite, including how desks treat a projection versus a 12-month history, read DSCR loans for Airbnb.
Entity vesting
Closing in an LLC is normal here
DSCR lenders routinely close loans to LLCs, corporations, and many revocable trusts. Investors do it for liability separation and clean partnership accounting. The lender will want the entity documents: articles, operating agreement, EIN letter, and a certificate of good standing, and the members personally guarantee the note. The guaranty is universal; nobody lends six figures to a two-month-old LLC on the LLC’s signature alone.
One practical note: form the entity before you go under contract, not the week of closing. Title, insurance, and the appraisal all need to match the vesting, and last-minute changes are the classic self-inflicted closing delay.
The honest part
What a DSCR loan costs you
A fair page tells you where this product takes more than it gives. Three places, mainly.
You pay a premium over agency financing. A conventional investor loan, when you can qualify for one, prices better than a DSCR loan for the same property. The premium is the cost of underwriting the property instead of you. If your tax returns actually support conventional qualifying, run that path first; we will tell you if they do. The full criterion-by-criterion decision is in DSCR vs conventional.
The prepayment penalty is real money. Agency loans haven’t carried prepay penalties in years. DSCR loans usually do, and investors who ignore the stepdown schedule donate thousands at their next refinance. Plan your exit before you pick the structure.
Thin ratios get squeezed. Everything that raises PITIA, and in Florida that means insurance and reassessed taxes after purchase, eats your ratio. A deal underwritten at 1.02 has no room for the insurance renewal that lands ten months later. We pressure-test the ratio with realistic Florida carrying costs before you commit, not after.
How DSCR compares
The rent carries the file. Your W-2 stays home.
Entity vesting and no personal DTI math as you scale.
The prepay structure is a choice you price, not a trap.
From scenario to closing
Price the deal before anyone pulls credit.
Send the address, the rent, and your target LTV. We run the ratio the way each DSCR desk runs it, put the competing terms side by side, and give you the numbers in writing.
Price the deal
Run the rent and payment through our DSCR calculator before you write the offer. Two minutes tells you whether the ratio clears 1.0.
Send the scenario
Address, purchase price, expected rent, credit range, and how you want to hold title. No hard credit pull at this stage.
We shop the non-QM desks
DSCR pricing varies more between lenders than any agency product. We put the file in front of the wholesale desks that compete for it.
Appraisal, ratio, clear-to-close
The appraiser's rent schedule locks the income number. From there the file runs like any other mortgage, usually leaner because there is no income re-verification.
Questions we actually get
What is the minimum DSCR a lender will accept?
Most programs draw the line at 1.0, meaning rent covers the full payment. As of mid-2026 there are desks that go below 1.0, some to 0.75 and a few with no-ratio options, but every step down costs you: lower maximum LTV, higher pricing tier, and bigger reserve requirements. A ratio of 1.25 or better is where the terms get comfortable.
Do DSCR loans show up on my personal credit report?
Often they don't, because many DSCR lenders don't report business-purpose loans to the consumer bureaus. Don't build a strategy on that. Any future lender will find the debt on the application, on title, and in your bank statements, and hiding it is misrepresentation. The honest benefit is different: a DSCR loan doesn't consume your personal DTI capacity the way a conventional investor loan does.
Can a first-time investor get a DSCR loan?
Frequently, yes. Some programs want you to have owned real estate before, or at least to have a current housing history, and first-timers may see slightly tighter LTV. Owning your own home for the past twelve months satisfies most desks. Tell us up front and we match you to the programs that allow it.
What rent figure is used if the property is vacant?
The appraiser completes a rent schedule (Form 1007 for single-family) estimating market rent from comparable leases. Vacant properties qualify on that number. If the in-place lease is higher than market, lenders typically cap you at the appraiser's figure or apply the lower of the two.
Can I use a DSCR loan to buy a home I'll live in part-time?
No. These are business-purpose loans on investment property, and occupancy is certified in the loan documents. Living in the property, even part of the year, is occupancy fraud. If you want a Florida second home, that's an agency or bank-statement conversation and we're happy to have it.
Can I refinance out of a DSCR loan later?
Yes, and investors do it routinely when rents rise or a prepay window ends. Check the penalty math first: refinancing in year two of a 3-2-1 structure costs 2% of the balance. Our refinance break-even calculator shows whether the savings clear the penalty and closing costs. And if the goal is pulling equity rather than replacing the loan, a DSCR second lien leaves the first mortgage, and its prepay clock, untouched.
Price your rental the way a lender will.
Send us the address, the rent, and your credit range. We come back with the programs that fit and the ratio math in writing.
This is not a commitment to lend or an offer of credit. All loan approvals are subject to credit review, underwriting, and property evaluation. Programs, terms, and conditions are subject to change without notice.
Intel Loans, Inc., NMLS #2858705. Licensed in Florida. Verify our licensing at nmlsconsumeraccess.org. Equal Housing Opportunity.
DSCR loans discussed on this page are business-purpose loans secured by investment property. They are not for homes you or your family will occupy.
Worked examples on this page are hypothetical illustrations for education, not quotes or offers. Your figures, including taxes, insurance, and payment amounts, will differ.