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300 – Lenora Street  Suite 850

Seattle WA 98121



A DSCR loan is a type of non-QM loan for real estate investors.  Lenders use a DSCR to help qualify real estate investors for a loan because it can easily determine the borrower’s ability to repay without verifying income.


How Does a DSCR Loan Work?

Because real estate investors write off expenses on their properties, some may not qualify for a conventional loan. The debt service coverage ratio loan allows these individuals to qualify more easily because they don’t require proof of income via tax returns or pay stubs that investors either don’t have or that don’t represent their true income due to write-offs and business deductions.

Benefits of DSCR Loans for real estate investors include:

Potentially quicker closing times

No income or job history verification required

No limit on the number of properties

Loan amounts up to $5,000,000

As little as 20% on down payments

Interest-only loan option available

Suited for new and seasoned real estate investors

Both long-term and short-term rentals are eligible (Airbnb, VRBO, etc.)

No reserves required on cashout loans, 6 months required on all other loans unless the DSCR ratio is less than 1.

What Is the Debt Service Coverage Ratio (DSCR)?

The Debt Service Coverage Ratio is a ratio of a property’s annual net operating income and its annual mortgage debt, including principal and interest. Lenders use DSCR to analyze how much of a loan can be supported by the income coming from the property as well as to determine how much income coverage there will be at a specific loan amount.