How do DSCR Loans Work?
DSCR loans, also known as Debt Service Cover Ratio loans, are loans for borrowers looking to buy an investment property. DSCR loans use the income generated from the prospective property to qualify for the loan, instead of the income of the borrower. They are favorable by investors looking to increase their portfolio, who may not have the income to qualify for an investment property.
Qualifications for a DSCR Loan?
Qualifications for a DSCR loan include:
- The prospective property must generate income that is equal to 1x-1.2x the mortgage payment
- At least a 20% down payment
- A credit score of at least 700