The property qualifies. Not your tax returns.
A debt-service-coverage-ratio loan asks one question: does the rent cover the payment? Troy uses it for landlords adding a door, refinancing a rental or buying with personal income that is complicated on paper.
- Qualifying basis
- The property's rental income measured against its payment
- Personal income documents
- None required
- Vesting
- Individual or LLC, by program
- Property types
- Single-family, condo and two-to-four-unit rentals
How it works
DSCR stands for debt-service coverage ratio: the property's monthly rent divided by its monthly payment of principal, interest, taxes, insurance and any association dues. A ratio of 1.0 means the rent exactly covers the payment. DSCR loans qualify the property on that ratio instead of qualifying you on tax returns, W-2s or debt-to-income.
That makes them the working tool for investors whose returns show depreciation and write-offs, who own several properties, who are self-employed, or who simply want to keep personal and investment financing separate. Many programs allow the loan to close in the name of an LLC.
Rent is established by a lease or by the appraiser's market-rent schedule. Programs set a minimum ratio, and pricing improves as the ratio and the down payment rise. Short-term rental income is treated differently by each investor, and Troy knows which ones count it.
- Landlords buying their next rental in Long Beach, the South Bay, Orange County or elsewhere in California
- Owners refinancing a rental to pull out equity for the next purchase
- Investors whose tax returns show little income after depreciation
- Self-employed investors who prefer not to document personal income
- Investors who hold title in an LLC
Not sure you fit? Ask. Troy tells people on the first call when a different program serves them better.
What to consider
Program details vary by investor and change over time. These are the questions that decide whether the loan is right for you; Troy confirms the specifics for your file.
The ratio
Rent against the full payment. Below the program minimum, a larger down payment or a different structure may bring the ratio into range.
Down payment and reserves
DSCR programs typically ask for a larger down payment than owner-occupied loans and for reserves after closing. Figures vary by program.
Prepayment penalties
Many DSCR loans carry a prepayment penalty for the first years in exchange for better pricing. Troy explains the options so you can match the penalty to your hold period.
Short-term rentals
Some investors count short-term rental income, with documentation; others use long-term market rent. Troy places the file where the strategy is understood.
The process
From the first conversation to funding, you deal with Troy.
Talk through the property
Address, purchase price or balance, current or expected rent. Troy runs the ratio on the first call.
Pre-qualification
Credit review and a written estimate with the ratio, the down payment and the reserves spelled out.
Appraisal with rent schedule
The appraiser establishes value and market rent. Troy clears conditions personally.
Close in your name or your LLC
Signing is scheduled around you. Troy coordinates escrow so the loan funds on the date you planned.
Questions people ask
General answers. The answer for your file comes from a conversation with Troy, not from a web page.
What ratio do I need?
It depends on the program. Many accept ratios at or near 1.0 and price better above it, and some allow lower ratios with a larger down payment. Troy runs your numbers and tells you where the file lands.
Do I need to show personal income?
No. The property's rent is the qualifying income. You will still need to document credit, assets for the down payment and reserves.
Can I close in an LLC?
Many DSCR programs allow vesting in an LLC with a personal guarantee. Troy confirms the requirements for the program that fits.
Can I use a DSCR loan on a short-term rental?
Some programs count documented short-term rental income; others use long-term market rent from the appraisal. The answer depends on the property's history and the investor.
Related programs
Often considered alongside this one. Troy prices the alternatives so you can see them side by side.
Bank statement
Self-employed income documented with 12 or 24 months of deposits instead of tax returns.
Refinance
Lower the payment, shorten the term or take cash out, with the before-and-after on the table before you decide.
Jumbo
Loan amounts above the county conforming limit for higher-value homes, with underwriting that reads the whole financial picture.
HELOC
A revolving line against your equity that you draw on as you need it, leaving your first mortgage untouched.
Talk it through with Troy.
No obligation and no credit pull on the first call. Tell him what you’re trying to do and he’ll tell you whether dscr investor financing is the right tool, and what it would cost.