DSCR Loan FAQs

At NASB, a DSCR (Debt Service Coverage Ratio) loan allows investors to qualify for a mortgage based on the property’s rental income—not personal income. Generally, DSCR loans are a type of Non-QM mortgage tailored for real estate investors.

NASB’s DSCR loan is ideal for real estate investors—including self-employed, 1099, and LLC borrowers—who want to qualify based on a property’s cash flow. It works best when rental income consistently covers expenses.

Yes—NASB’s DSCR loan is a Non-Qualified Mortgage (Non-QM) solution that evaluates borrowers using alternative methods beyond W-2s or tax returns. Generally, Non-QM loans like this offer flexibility for complex investor profiles.

NASB typically requires a minimum credit score of 700 for a competitive DSCR loan. Generally, higher scores lead to better rates and terms.

NASB’s DSCR loan requires a minimum down payment of 20–25%, depending on factors such as credit, property type, and rental income coverage. Typically, stronger DSCRs and borrower profiles can lower the down payment threshold.

The NASB generally requires a minimum DSCR of 1.0+, meaning rental income must fully cover the property’s debt obligations. Industry standards often prioritize 1.20+ for safety.

NASB’s DSCR program supports 1–4-unit rental properties, including single-family homes and condos. Availability for short-term rentals varies by location and underwriting.

NASB requires property rental documentation (leases or comparable rent schedules), current bank statements, proof of reserves, an appraisal, and standard ID/credit documentation. Generally, no W-2s or tax returns are required.

NASB’s DSCR loan closes on a timeline similar to standard mortgages, often within 30–45 days. Generally, streamlined documentation helps accelerate the process.

Yes—NASB’s DSCR loans carry higher interest rates than conventional mortgages but remain competitive in the Non-QM investor space. Rates generally depend on DSCR, down payment, creditworthiness, and loan size.

NASB offers DSCR loans for purchase and refinance transactions, including cash-out options for properties with sufficient equity. Generally, refinancing requires meeting DSCR and equity thresholds.

Yes—NASB allows DSCR cash-out refinances at a maximum 70% LTV and a minimum 740 FICO, otherwise a 60% maximum. Generally, this helps investors free up capital while maintaining portfolio growth.

NASB permits DSCR loans for properties held in LLCs or certain trusts, subject to documentation and eligibility requirements. Generally, entity ownership is common for investment properties and is supported by many Non-QM lenders.

NASB’s DSCR loans do not have prepayment penalties. Typically, Non-QM investor loans feature prepayment structures; verify the terms before closing.

NASB does not impose a strict cap on the number of DSCR loans, but overall exposure and portfolio risk are considered. Generally, lenders review aggregate leverage and property performance.

NASB evaluates DSCR using current leases or market rents; vacancies may require additional reserves or a lower LTV. Industry practice often uses market rent analysis to mitigate vacancy risk.