How DSCR Loans Work
Qualify on rent
The property qualifies, not you
A DSCR loan compares the property's rent to its monthly payment, including taxes, insurance, and HOA dues. No W-2s, tax returns, or debt-to-income ratio.
DSCR Loans
DSCR Loans for Real Estate Investors
Qualify on the property's rental income, not your tax returns. Close in your name or an LLC.
No tax returns
No tax returns
No tax returns
No tax returns
No tax returns
No tax returns
DSCR Loan Guidelines
Typical requirements across our DSCR lenders. Apply if you're close and we'll find a fit.
Credit Score
Most programs start at a 660 credit score. Higher scores earn better pricing.
Property Type
Investment properties only, including single-family homes, 2–4 units, condos, and townhomes.
DSCR Ratio
Most lenders look for 1.0 or higher. Some allow lower ratios with a larger down payment.
Loan Limits
Loan amounts from $75,000 up to $2.5 million.
Reserves
Expect to show several months of payments in reserves, depending on loan size.
Down Payment
Usually 20–25% down. A larger down payment can improve your rate.
Mortgage Insurance
DSCR loans have no mortgage insurance.
The DSCR formula
Rent ÷ payment = DSCR
A ratio of 1.0 means the rent covers the payment. Most lenders want 1.0 or higher, and a higher ratio usually earns a better rate.
Flexible structure
Close in an LLC
Buy in your own name or through an LLC, partnership, or corporation. Interest-only and 40-year options can improve your monthly cash flow.
Prepayment options
Choose your prepayment terms
Many DSCR loans carry a prepayment penalty in exchange for a lower rate. We'll show you pricing with and without one, so you can match it to how long you plan to hold.
Built for investors
First-time investors welcome
You don't need rental history to qualify. Foreign nationals can qualify too, and loan amounts run from $75,000 to $2.5 million with many of our lenders.
How It Works
Run Your DSCR
Estimate the rent and payment with our DSCR calculator to see if the property qualifies.
Get Pre-Approved
Share your credit, assets, and the property details. No income documents needed.
Lock Your Property
Go under contract in your name or an LLC. The appraisal includes a market rent estimate.
Close Confidently
We'll guide you from contract to closing day and compare lenders the whole way.
Do's and Don'ts
Do
Run the Numbers First
Check the DSCR before you make an offer so you know the property qualifies.
Budget for Reserves
Plan for closing costs plus several months of payments in reserves.
Compare Lenders
DSCR pricing varies widely between lenders. We compare 5+ to find your best rate.
Don't
Open New Credit Accounts
Taking on new debt can impact your credit score and loan approval.
Make Large Unverified Deposits
Lenders ask you to document large deposits, so keep your down payment funds in your accounts.
Overestimate the Rent
Lenders use the appraiser's rent estimate or a signed lease, not your projections.
DSCR vs. Other Investor Loans
How a DSCR loan compares with conventional and bank statement loans for rental properties.
DSCR
Conventional
Bank Statement
Credit Score
660+
620+
660+
Down Payment
20–25%
15%+ (1 unit)
Varies
Income documents
None
Tax returns and W-2s
12–24 months of statements
Close in an LLC
Yes
No
Yes
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Sukesh was great from start to finish. I first reached out to him in June of 2023 and he got me pre-approved same day. I ended up putting in an offer on a new construction in July and Sukesh was on it every step of the way. He was always available, didn't matter the time of the day. He was also very knowledgeable, answered all of my questions and offered the best suggestions with concrete reasoning to back it up. I ended with a rate lower than market and I couldn't have been happier. My home was eventually completed in March 2024 and the closing process was fast and smooth. With Sukesh there's no such thing as a standard 30 or 45 day close, it felt more like one week close. I highly recommend Sukesh and Altgage, you won't regret it.
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I felt confident moving from California to Texas for a much needed fresh start to a new life
I had an excellent experience working with Sukesh Shekar at Altgage Inc. From start to finish, he was professional, knowledgeable, and incredibly helpful. He took the time to explain every step of the process, and helped me through a tricky signing day with an ex. I felt confident in my loan options. His dedication and attention to detail made the entire experience smooth and stress-free. I highly recommend Sukesh to anyone looking for a reliable and supportive loan officer.
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Gopala lowered his costs and moved into his dream home
I wanted to thank and appreciate Sukesh for his help and support starting from the loan application process till closing of our new home. Sukesh is very transparent and provided us with eligible incentives that helped in lowering our closing costs.
He has great knowledge about different areas of mortgage needs and he works with core customer centric values to help clients fulfill their Mortgage needs.
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We got the lowest rate after searching from California to Colorado
Sukesh was really awesome throughout the whole process of purchasing our new home in Boulder county Colorado. We got the lowest rates possible, and he was always looking for additional ways for us to save money. Everything was super fast, and super easy. Communication was always clear and quick. We highly recommend Altgage!
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Recent Articles
Guides for real estate investors.
Frequently asked questions
You’ve got questions, we’ve got answers
A DSCR loan qualifies you based on a rental property's income instead of your personal income. The lender divides the monthly rent by the monthly payment, including taxes, insurance, and HOA dues.
Most DSCR loans need 20–25% down. Your credit score and the property's DSCR affect the exact amount and your rate.
Yes. Many of our DSCR lenders allow first-time investors with no rental history.
Yes. DSCR loans can close in an LLC, partnership, or corporation, which many investors use to separate their rental properties from personal assets.
