Business funding
DSCR Loans
Rental property financing that qualifies on the property, not your tax returns.
General qualification guideline; lender and program requirements may vary.
Overview
Let the property qualify itself
A DSCR (Debt Service Coverage Ratio) loan is a mortgage for income-producing real estate. Instead of qualifying on personal income, the lender looks at whether the property’s rental income covers its own debt payments. That makes it a common choice for investors buying or refinancing rentals, including those who hold property in an LLC.
Benefits
- —Qualifies on the property's rental income rather than personal tax returns
- —Works for purchases, rate-and-term refinances, and cash-out refinances
- —Property can be held personally or in an LLC or other entity
- —Suited to investors building a rental portfolio
- —The ratio is simple: rent divided by the monthly payment
Good for
Situations where it tends to fit
Property types and permitted structures depend on the lender and program.
Documentation
What you will typically need
Documentation centers on the property and how you hold it:
- —Property address and purchase or refinance details
- —Current or projected rent (a lease or market rent analysis)
- —Entity documents if the property is held in an LLC
- —Government-issued ID
Qualification factors
What generally matters
- —Rent relative to the monthly payment (principal, interest, taxes, insurance, HOA)
- —Down payment, typically in the 10 to 20 percent range
- —Reserves, roughly six months of payments
- —Personal credit profile
- —Property type and condition
- —Lender / program guidelines
Education
Learn before you apply
DSCR explained
Debt Service Coverage Ratio: how an investment property qualifies on its own rent, and the three numbers that decide it.
Common questions
DSCR loans, answered plainly
What is a DSCR?
Debt Service Coverage Ratio: the property's monthly rental income divided by its monthly debt payment, including principal, interest, taxes, insurance, and any HOA. A ratio of 1.0 means the property breaks even; lenders generally want to see 1.0 or higher. Requirements vary by lender and program.
Do I need to show my income?
Generally, no. The property's income is what qualifies. Lenders still review your credit profile and may ask about reserves and other obligations, but personal tax returns are usually not the basis for the decision.
Can I hold the property in an LLC?
Often, yes. Many DSCR programs allow title in an LLC or other entity. If that is your plan, we will ask for the entity documents up front so the file moves cleanly.
What down payment and reserves are typical?
Down payments in the 10 to 20 percent range and reserves of roughly six months of payments are typical guidelines. They are not cutoffs, and the right answer depends on the property, the ratio, and the program.
Have a rental in mind?
A few quick questions will tell you whether a DSCR loan is worth exploring for that property.
The guidelines on this page are general guidelines only — not guaranteed lender approval requirements. Requirements vary by lender and program. TK Capital Solutions is not a lender; all funding is subject to lender underwriting and approval.