Loan Programs · Investor loans

DSCR loans that qualify on the property's rent

A DSCR loan looks at whether the rental property pays for itself, not at your personal tax returns. For many South Florida investors, especially business owners and those with several properties, that is a simpler path. We explain how lenders calculate the ratio and what they look for.

DSCR Loans explained

DSCR stands for debt service coverage ratio. The lender divides the property's monthly rent by its monthly housing payment, including principal, interest, taxes, insurance and any HOA dues. A ratio of 1.0 means the rent covers the payment exactly. Many lenders look for a ratio at or above 1.0, though some programs may allow lower ratios with tighter terms. DSCR loans are non-QM business-purpose loans, so guidelines for credit, down payment, reserves and property types vary by investor and are subject to credit approval.

Who it fits

  • Investors whose tax returns show low income because of write-offs
  • Self-employed buyers and business owners
  • Investors with many financed properties
  • Buyers who want to close in an LLC
  • Investors buying long-term or, with some lenders, short-term rentals

Florida specifics

  • High Florida insurance premiums and HOA dues are part of the DSCR calculation, so two homes with the same rent can have very different ratios.
  • Condo rental restrictions and Florida's newer condo inspection and reserve rules can affect whether a lender will finance a unit.
  • For short-term rentals, some lenders may use projected income data, but local ordinances and Florida licensing still apply.
  • Property taxes on rentals do not benefit from the homestead exemption and can rise after a sale reassesses the property.

How it works with Justin

  1. We estimate the property's rent and full monthly payment to project the ratio.
  2. We compare DSCR programs from several investors based on your credit, down payment and reserves.
  3. Under contract, the appraisal includes a market rent schedule that the lender uses in the final ratio.
  4. We close in your name or your LLC, depending on the program.

Documents to gather

  • Purchase contract or current mortgage statement
  • Existing leases, or the appraiser's market rent estimate
  • Bank statements for down payment and reserves
  • LLC operating agreement and articles if closing in an entity
  • Insurance quote and HOA dues

Things to consider

  • DSCR loans usually carry higher pricing than conventional investment loans.
  • Down payments are often larger, and prepayment penalties are common.
  • A higher insurance quote or HOA dues can lower the ratio enough to change the terms.
  • These are business-purpose loans, not for a home you will live in.

Share a few details and Justin will tell you whether DSCR fits, with real numbers for your loan.

DSCR Loans: common questions

What is a good DSCR for a rental property?

Many lenders look for a ratio of 1.0 or higher, meaning the rent covers the full monthly payment. A higher ratio often leads to better terms. Some programs may allow lower ratios, usually with a larger down payment.

Do DSCR loans require tax returns?

No. DSCR lenders generally do not use your personal tax returns or W-2s to qualify you. They focus on the property's rent, your credit and your reserves.

Can I get a DSCR loan in an LLC in Florida?

Many DSCR programs allow you to close in an LLC. Lenders usually require the LLC documents and a personal guarantee from the owners.

How much down payment does a DSCR loan need?

It varies by investor, credit, property type and ratio. DSCR down payments are often larger than for a conventional primary home loan. We compare several programs so you can see the options.

Can I use a DSCR loan for an Airbnb in South Florida?

Some lenders allow short-term rental income, often based on market data or past booking history. You still need to follow city and HOA rules and Florida licensing requirements.

Do DSCR loans have prepayment penalties?

Many do, often declining over the first few years. Shorter or no-penalty options may be available with different pricing. We explain the trade-off before you choose.

Related loan programs

  • Investment Property Loans — Financing for South Florida rental properties: conventional investment loans, rental income rules, condo and HOA rental limits, and when DSCR fits better.
  • Bank Statement Loans for the Self-Employed — Bank statement mortgages for self-employed Florida borrowers: qualify on deposits instead of tax returns. How income is figured and what to prepare.
  • Fix and Flip Loans — Short-term fix and flip financing for South Florida investors: purchase plus rehab funding, draws, timelines and how lenders look at after-repair value.
  • No-Doc and Non-QM Loans — Non-QM mortgages in South Florida: asset depletion, 1099, P&L-only and other alternative documentation loans for borrowers who don't fit the usual mold.

South Florida areas where it fits

Guides on this topic

See all 21 loan programs, mortgage loans in Florida, or every state where Justin lends.

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