What is a DSCR loan and how does it work?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A DSCR loan qualifies an investment property on its own rental cash flow instead of your personal income. DSCR stands for debt service coverage ratio — the property's rent divided by its full monthly payment.
If the rent covers the payment (a ratio of 1.0 or higher), the property qualifies without tax returns or W-2s. It's the go-to tool for Florida investors and LLCs scaling a rental portfolio. We typically need 20% to 25% down.
Property income, not yours
A DSCR loan qualifies an investment property on its own rental income, not your personal income. DSCR stands for debt service coverage ratio, which compares the rent to the mortgage payment.
If the rent covers the payment, the property qualifies. That means no pay stubs, no tax returns, and no personal income check.
Why investors love it
DSCR loans let you scale a rental portfolio without your personal debt ratios getting in the way. You can buy property after property as long as each one cash flows.
They are perfect for Florida investors buying long-term or vacation rentals. Reach out and we will run a DSCR scenario on the property you have in mind.