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What is a DSCR loan?

Quick answer

A DSCR (debt service coverage ratio) loan is an investment-property mortgage qualified mainly on the property's expected rent compared to its monthly payment, rather than your personal income or tax returns. A DSCR of 1.0 means rent equals the payment. Expect 20–25% down, credit scores of about 660+, and rates above owner-occupied loans.

By Purchase Mortgage Loan Editorial Team Checked against official sources per our editorial standardsLast updated
Min. down: 20%–25%Min. credit: 660–700

How is DSCR calculated?

Lenders divide the property's market rent (from an appraiser's rent schedule or an existing lease) by the full monthly payment: principal, interest, taxes, insurance and any HOA dues. Example: $2,400 rent ÷ $2,000 payment = 1.20 DSCR.

Typical DSCR loan requirements

  • Down payment: 20%–25% (sometimes 15% for strong files).
  • Credit: 660–700 minimum.
  • Reserves: commonly 3–12 months of payments.
  • Property types: 1–4 unit homes, condos and townhomes; some lenders allow short-term rentals.

DSCR loans by state

DSCR loans in AlabamaDSCR loans in AlaskaDSCR loans in ArizonaDSCR loans in ArkansasDSCR loans in CaliforniaDSCR loans in ColoradoDSCR loans in ConnecticutDSCR loans in DelawareDSCR loans in District of ColumbiaDSCR loans in FloridaDSCR loans in GeorgiaDSCR loans in HawaiiDSCR loans in IdahoDSCR loans in IllinoisDSCR loans in IndianaDSCR loans in IowaDSCR loans in KansasDSCR loans in KentuckyDSCR loans in LouisianaDSCR loans in MaineDSCR loans in MarylandDSCR loans in MassachusettsDSCR loans in MichiganDSCR loans in MinnesotaDSCR loans in MississippiDSCR loans in MissouriDSCR loans in MontanaDSCR loans in NebraskaDSCR loans in NevadaDSCR loans in New HampshireDSCR loans in New JerseyDSCR loans in New MexicoDSCR loans in New YorkDSCR loans in North CarolinaDSCR loans in North DakotaDSCR loans in OhioDSCR loans in OklahomaDSCR loans in OregonDSCR loans in PennsylvaniaDSCR loans in Rhode IslandDSCR loans in South CarolinaDSCR loans in South DakotaDSCR loans in TennesseeDSCR loans in TexasDSCR loans in UtahDSCR loans in VermontDSCR loans in VirginiaDSCR loans in WashingtonDSCR loans in West VirginiaDSCR loans in WisconsinDSCR loans in Wyoming

Frequently asked questions

Many lenders allow first-time investors, sometimes with a larger down payment or higher DSCR requirement.

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Figures on this page are estimates for educational purposes only and are not a loan offer or commitment to lend. Rates, loan limits, fees and assistance programs change frequently and vary by lender, location and borrower profile. Confirm current terms with a licensed loan officer.