DSCR Loan

A Debt Service Coverage Ratio (DSCR) loan looks at the cash flow generated from an investment property to qualify for a mortgage instead of personal income.

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What is a DSCR loan
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Key Features

No personal income required

Down payments as little as 20%

Qualify based on cash flow

Use your investment to qualify for a DSCR loan.

If you want to purchase an investment property without using your income to qualify, a DSCR mortgage from NASB may be the solution. To determine eligibility, we look at your debt service coverage ratio (DSCR).

As a DSCR loan lender, NASB offers:

  • Reasonable rates
  • In-house underwriting
  • Down payments as low as 20%, depending on your credit score and DSCR

You can choose from a short-term rental DSCR loan or a long-term rental DSCR loan.


Video - What is a DSCR loan?


This video shows how a DSCR loan can help real estate investors purchase a property based on the cash flow generated instead of personal income.


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Alexander S., April 5, 2024
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"I was pretty much locked in with another lender but wasn't 100% convinced. I did a Google search looking for the best mortgage options for business owners/self-employed, and NASB popped up in several places with solid recommendations. For us, it was like a final Hail Mary to ensure we looked at all possible options. We couldn't be more glad we took that last step and found you. Your speed is second to none, and the service was amazing from start to finish. Needless to say, we are also very happy with the rate that we got."
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DSCR Loan FAQs

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. 

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.

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).

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.
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.  


Long-Term Rental 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 80% max loan-to-value (LTV) ratio
  • Minimum 700 FICO score
  • Eligible property types are 1‐2 family and warrantable condos
  • Fixed-rate loan type
  • No prepayment penalty

  • A minimum loan amount of $175,000 is required to apply


Short-Term Rental (STR) 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
  • No prepayment penalty

  • A minimum loan amount of $175,000 is required to apply


*Not available in New York state, 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 680 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.