Key Features
All underwriting done in-house
Qualify based on cash flow
No personal income required
Use the income from your investment to qualify for a DSCR loan.
If you want to use your LLC to purchase an investment property but don't want to use your personal income to qualify, a DSCR mortgage from NASB may be the solution. We look at your debt service coverage ratio (DSCR) based on the income from the property to determine eligibility. NASB offers competitive rates, in-house underwriting, and a down payment as low as 25%, depending on your credit score and DSCR.
DSCR Loan FAQs
What is a DSCR loan?
A DSCR loan is a measure of the cash flow a borrower has to pay against current debt obligations for an investment property. A DSCR loan is a type of non-QM loan used by real estate investors to help them qualify for a loan based on their property’s cash flow, without having to verify personal income.
How is a debt service coverage ratio calculated?
The debt service coverage ratio is calculated by simply dividing the net operating income of the investment property by the debt obligations. For example - if your annual income is 100,000, and you know the debt obligations are $80,000, then your DSCR is 1.25 (100,000 / 80,000).
How does a DSCR loan work?
A DSCR loan doesn’t require proof of personal income through tax returns or pay stubs. A real estate investor just needs to show their ability to repay the lender by having a qualifying DSCR.
What is a good debt service coverage ratio?
A debt service coverage ratio of 1.0 indicates your investment property is generating sufficient income to just cover the mortgage payments and expenses. A DSCR greater than 1.2 is typically considered a good ratio for residential investment property.
How do you qualify for a DSCR loan?
It's actually very simple to qualify for a DSCR loan. The property must generate enough rental income to offset the mortgage payment plus other expenses associated with the investment property. The minimum debt service coverage ratio required is between 1.1x and 1.2x, which means the property must produce between 10% and 20% net positive cash flow after all expenses have been deducted. A minimum loan amount of $175,000 and a 700 FICO score is also required.
DSCR Loan Requirements*
- No personal income documents are required to qualify. Qualifying factors are based on the cash flow of the subject property
- Debt service coverage ratio minimum – 1.0x
- Up to 75% max loan-to-value (LTV) ratio
- Minimum 700 FICO score
- Eligible property types are 1‐2 family and warrantable condos
- Fixed-rate loan type
A minimum loan amount of $175,000 is required to apply
Jeff Wagner
Vice President,
Commercial Real Estate Loan Officer
Call: 816-214-8116
Email: jwagner@nasb.com
*Not available in the states of New York or New Jersey, the Chicago or Baltimore metropolitan areas, and not available in all locations or for all property types. Loans subject to underwriting and eligibility criteria, and other factors. Your loan officer will provide you with more information regarding DSCR loans and what may work best for your situation. Minimum loan amount of $175,000 and minimum credit score of 700 required to apply. Exceptions include mortgage products for properties located within the Greater Kansas City metro and surrounding areas. Contact a NASB Loan Officer for more details on the specific areas and/or zip codes excluded.