If you’re purchasing a rental property, you generally have two primary financing options: A conventional investment loan A DSCR (Debt Service Coverage Ratio) loan. Understanding the difference between …
If you’re a real estate investor, you’ve likely heard the term DSCR loan — but what exactly does it mean? A DSCR (Debt Service Coverage Ratio) loan is …
A DSCR loan qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Most purchase files land at 75%-80% LTV.
On a rental purchase, that comparison is the debt service coverage ratio, or DSCR.
A direct lender gives you one set of rules and one point of contact. A broker gives you one application shopped across several lenders.
The core question is whether market rent covers the monthly housing payment, plus credit, reserves, and leverage.
The lender compares the property’s rent to its full monthly obligation: principal, interest, taxes, insurance, and any HOA dues.