DSCR Rental Loans · 6 min read

DSCR loans explained

A DSCR (Debt Service Coverage Ratio) loan is an investment-property loan that qualifies on the property’s rental income instead of your personal income. There are no tax returns, no W-2s, and no debt-to-income calculation — the property’s rent versus its payment is what gets you approved. Qualr Capital funds DSCR loans up to 85% LTV, 30- and 40-year fixed, with a minimum DSCR as low as 0.50.

What is a DSCR loan?

A DSCR loan is a business-purpose mortgage for rental real estate where the lender underwrites the asset, not the borrower’s tax returns. Because qualification is based on cash flow, DSCR loans are ideal for self-employed investors, full-time landlords, and anyone whose tax returns understate their true buying power.

These are not consumer mortgages — they are for investment properties held for business purposes, and they can close in an LLC or corporation for asset protection.

How is DSCR calculated?

DSCR = monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, and any HOA). A DSCR of 1.0 means the rent exactly covers the payment; above 1.0 means positive cash flow.

Example: a property rents for $2,400/month with a total payment of $2,000/month. DSCR = 2,400 ÷ 2,000 = 1.20. Qualr lends with a DSCR as low as 0.50, and interest-only options can push the ratio higher by lowering the payment.

DSCR loan requirements

Most programs start at a 620 FICO, with better leverage and pricing at 660+ and 740+. Maximum leverage is up to 85% LTV on a purchase and up to 80% CLTV on a cash-out refinance. Expect to document property insurance and a lease (or market-rent appraisal). Typical reserves are around six months.

DSCR loan vs. conventional mortgage

A conventional loan caps how many financed properties you can hold and requires full income documentation. A DSCR loan has no such limit and no personal-income docs, so it’s the standard tool for scaling a portfolio past the conventional ceiling.

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Frequently asked questions

Do DSCR loans require tax returns?

No. DSCR loans qualify on the property’s rental cash flow, so no tax returns, W-2s, or DTI are required.

What is a good DSCR?

A DSCR of 1.0 means rent covers the payment exactly; 1.20+ is strong. Qualr funds ratios as low as 0.50, with interest-only options to improve coverage.

What credit score do I need for a DSCR loan?

Most programs start at 620 FICO. Stronger credit unlocks higher leverage (up to 85% LTV) and better pricing.

Can I close a DSCR loan in an LLC?

Yes. DSCR loans are business-purpose, so you can vest title in an LLC or corporation.

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