BuyerFinancing June 22, 2022

Non-Traditional Financing: Debt Service Coverage Ratio Loan

Are you a real estate investor looking to add properties or a person wanting to become a real estate investor?  Do you have at least 20% for a down payment?  The Debt Service Coverage Ratio (DSCR) loan may be the perfect option in either case to help you acquire your next property.

This is a great program to help investors buy rentals, without having to provide a laundry list of financials to the lender, as they are qualified as long as the property has a DSCR >1.  Simplified, this means if the property can rent for more than the mortgage payment, then the investor is qualified.  The loan still requires the borrower to have strong credit, a down payment and cash reserves.

It is a great loan for several reasons, but the biggest positive is the DSCR loan does not have the requirement for tax returns or paystubs, like a No-Ratio Loan.  In many cases, investors will not qualify for a conventional loan even though they can afford to purchase, because most investors write expenses off against their properties to show limited income from their investments on their taxes.


  • Qualifications based on property cash flow, not Owner’s Income
  • Market rents are used to qualify (ex. Zillow’s Rent Zestimate®)
  • No income documentation is needed
  • Potentially quicker closing times
  • No limit on the number of properties
  • Interest-only loan option available
  • Both long-term and short-term rentals are eligible (Airbnb, VRBO, etc.)
  • Cash out Refinances (Up to 65% LTV)
  • Will lend on Condo-Tel
  • First-time investors allowed


  • Higher Interest Rate
  • Required cash reserves
  • Minimum 20% downpayment

Give Mark Moyes a call, (801) 999-0886, if you would like more information about your options with this and other types of loans.

Anyway, thanks for your time.  If you’d like to connect or share your thoughts, I can be reached via email at

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Disclaimer:  I am not a Lender or Mortgage Broker!  I cannot qualify you for a loan, I do not know what your cost or rate would be, nor do I know the full requirements for any of the loans.  If you need help with financing, please talk with your lender.