DSCR Loans: Debt Service Coverage Ratio
What Is a DSCR Loan?
DSCR loans are built for real estate investors who want to qualify based on the cash flow of the property — not their personal income. These loans calculate the Debt Service Coverage Ratio (DSCR) by comparing the monthly rent to the monthly mortgage payment.
No tax returns. No income verification. Just the property’s ability to cover its debt.
How DSCR Works
The basic formula:
DSCR = Monthly Gross Rent ÷ Monthly PITIA (Principal, Interest, Taxes, Insurance, HOA)
- A DSCR of 1.00 means the property breaks even
- A DSCR above 1.00 means the property cash flows positively
- Some programs allow for ratios as low as 0.75, depending on reserves and credit
Benefits of DSCR Loans
- No personal income documentation required
- Fast, streamlined underwriting focused on property performance
- Qualify using market rent, not your tax return
- Available for short-term rentals, long-term rentals, and multi-unit investment properties
- Great for growing portfolios with multiple financed properties
Ideal for:
- Real estate investors with multiple doors or short-term rentals
- Self-employed borrowers who want to keep income separate from investing
- Investors looking to scale quickly without hitting DTI caps
If you’re an investor who wants a no-hassle, asset-based loan that lets the property speak for itself — DSCR may be the perfect fit. Let Motivation Mortgage structure your investment financing around what matters: cash flow and growth.
Questions? Contact Motivation Mortgage Today!