Who DSCR loans are for
DSCR loans are designed for real estate investors. They may be useful when the borrower wants the rental property's income to carry more weight than personal W-2 income or tax-return income.
These loans are commonly reviewed by:
- Buy-and-hold rental investors
- Short-term rental investors
- Self-employed investors
- Investors with multiple properties
- Borrowers who need a refinance or cash-out refinance on a rental
How DSCR works
DSCR stands for debt service coverage ratio. In simple terms, it compares rental income to the property's mortgage payment and other required housing expenses. The stronger the property cash flow, the better the file may look under a DSCR program.
Each lender has its own rules for income, appraisal rent schedules, lease treatment, short-term rental income, credit, reserves, down payment, and property type.
When a DSCR loan may make sense
A DSCR loan may be worth reviewing if:
- You are buying a rental property.
- You want to refinance an investment property.
- You need cash out from a rental.
- Your personal tax returns are complicated.
- You own multiple properties.
- You want to qualify based more on property income than personal income.
Talk it through
If you are buying or refinancing a California rental property, request a DSCR loan review with LoansByJB.
Not a commitment to lend. All loan programs are subject to credit approval, income and asset verification, property review, and program guidelines. Rates, terms, and availability may change.