Investment Property Financing

DSCR Loans for Real Estate Investors

Tired of your tax returns deciding how many rentals you can own? A DSCR loan qualifies the property on its rent instead of qualifying you. We shop it across more than 100 lenders. Start with a conversation, not an application.

5.0 · 21 Google reviews NMLS #1277693 Over 20 years mortgage & real estate experience Licensed in California

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DSCR Calculator

Analyze this property's cash flow and income potential.

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Estimates only. Not a quote or commitment to lend. All loans subject to underwriting approval. NMLS #1277693.

Full DSCR Calculator with detailed breakdown →

What Is a DSCR Loan?

You want another rental and your lender keeps pointing at your debt to income ratio. A DSCR loan takes you out of the calculation entirely. The lender asks one question instead: does the rent cover the payment? Your tax returns, your W-2s and your other mortgages never enter it. If your returns are messy for other reasons, compare this against a bank statement loan or an asset depletion loan before you pick a path. Get a quote and we will tell you which one fits.

How the DSCR Ratio Is Calculated

Take the property's gross monthly rent and divide it by the full monthly payment. That payment means principal, interest, property taxes, insurance and HOA, not just the mortgage. A rent of $3,200 against a payment of $2,900 gives you a DSCR of 1.10. Most lenders want to see 1.0 or better, some want 1.25, and a few will go below 1.0 if you put more down. The rent comes from your signed lease, or from the appraiser's market rent schedule if the place is empty.

Why Investors Switch to DSCR

Conventional lenders usually stop being useful somewhere around your fourth or fifth property, because every new mortgage lands on your personal debt to income and eventually there is no room left. DSCR has no such ceiling, so your portfolio can keep growing as long as each property carries itself. If you are buying something that needs work first, a hard money loan gets you in, and you refinance into a DSCR loan once it is rented and stable.

Using Airbnb and Short Term Rental Income

You run the place as a short term rental and it earns far more than a year lease would. Plenty of lenders will count that, usually off 12 months of booking history or a third party projection like an AirDNA report. Others ignore it completely and underwrite the property at long term market rent, which can be the difference between approval and decline. We know which lenders do which, so tell us how the property actually operates before we pick one.

DSCR Loans in Los Angeles and Southern California

Rents in Los Angeles and Orange County have not kept pace with prices, so a property that would sail through in Texas can land at a DSCR of 0.90 here. That does not kill the deal. Put more down, hold more in reserve, or work with one of the lenders who writes below 1.0 on strong files. Prices here also push a lot of investor loans into jumbo territory, and not every DSCR lender goes that high. Talk through your numbers with us before you make an offer.

Leo Teplitsky, Mortgage Broker | Founder, Advanced Funding Solutions — **— Leo Teplitsky** Mortgage Broker | Founder · NMLS #1277693

Why Borrowers Choose Us

What a DSCR Loan Does for You

Your tax returns stay out of it

You are not handing over two years of returns, W-2s or a debt to income calculation. The lender looks at what the property rents for against what it costs to own, and that is the qualification. If your returns show a lot of depreciation and write offs, this is the loan that stops punishing you for them.

Buy it in your LLC

Most DSCR lenders will close in the name of your LLC, which is usually the whole reason investors ask about them. You will need the operating agreement and proof the entity is in good standing in its state. A conventional lender would make you take title personally and then deal with a transfer afterwards.

Built for Southern California numbers

Rents here have not kept up with prices, so plenty of good LA and Orange County properties land below the 1.25 ratio most lenders want to see. Some lenders write below that when you put more down or hold more in reserve. We know which ones, and we know which of them go to jumbo loan sizes, which matters constantly at California prices.

No ceiling on how many you own

Conventional lenders start saying no somewhere around your fourth or fifth property because your personal debt to income runs out of room. DSCR does not work that way. Each property stands on its own rent, so the portfolio can keep growing. Lenders do set their own caps on financed properties, and we will tell you each one's before you apply.

Airbnb income can count

If the place earns far more as a short term rental than it would on a year lease, some lenders will qualify it on that number, usually off 12 months of booking history or a projection report. Others ignore it and use long term market rent instead. That single difference can decide the deal, so tell us how the property actually operates.

Pull cash out to buy the next one

Once a property has been rented for a while you can refinance and take equity out to fund the next purchase. How much you can pull and how long you have to own it first changes from lender to lender. This is how most portfolios actually compound, so it is worth choosing the lender with that in mind up front.

DSCR Loan Terms at Advanced Funding Solutions

What qualifies you

The property's rent against its full monthly payment

What you do not provide

Tax returns, W-2s, or a debt to income ratio

Typical ratio lenders want

1.0 or better, and some want 1.25

Below 1.0

Possible with a larger down payment or more in reserve

Title in an LLC

Yes, with most lenders

Property types

Single family, 2 to 4 units, condos, townhomes

Short term rental income

Counted by some lenders, ignored by others

Cash out refinance

Available, with a waiting period that varies

Lenders we shop

More than 100, one application

Who Qualifies

Who DSCR Loans Are For

Contact Advanced Funding Solutions to discuss whether this program may be a fit for your situation. Eligibility, loan amounts, and terms are determined after a complete application and underwriting review.

Get a Quote →

You own a few rentals already and your debt to income has run out of room
You work for yourself and your tax returns do not show what you really earn
You have a W-2 job and want your first investment property
You run the place on Airbnb and it earns far more than a year lease would
You want to hold the property in an LLC rather than your own name
You want to pull equity out of one rental to go buy the next

The Process

How to Get a DSCR Loan

Tell us about the property

What it costs, what it rents for, and whether it is leased, empty, or running as a short term rental. That is enough for us to run the ratio and tell you roughly where you land. Nothing formal starts at this stage and you are not filling out an application yet. If the numbers do not work, we will say so on that first call rather than let you find out six weeks in.

Get your reserves lined up

Almost every DSCR lender wants to see money left in the bank after closing, usually counted in months of payments. How many months, and whether they will count your retirement accounts toward it, is one of the bigger differences between lenders. It is worth knowing which lender to aim at before you move money around or sell anything.

Appraisal and title

The appraiser values the property and, if it is empty, fills out a market rent schedule that becomes your qualifying rent. That form is doing real work on a DSCR file, so it is worth making sure the appraiser sees the property at its best. We order it as soon as your file goes in and we read it when it comes back, rather than forwarding you a PDF.

Underwriting and closing

The lender underwrites the file, confirms the ratio and issues the final terms in writing. We handle the document requests and stay on it through closing. If you are taking title in an LLC, have the operating agreement and your state good standing paperwork ready early, because that is the single most common thing that holds up a DSCR closing.

FAQ

DSCR Loan Questions

What exactly is a DSCR loan?

It's an investment property loan that qualifies the property instead of qualifying you. The lender divides what the place rents for by what it costs to own each month, including taxes, insurance and HOA. If that number works, you're approved. Your tax returns, your W-2s and the other mortgages you're carrying never come into it. That's why investors switch to DSCR once conventional lenders start running out of room.

Do I have to show my tax returns?

No, and that's the entire point. A DSCR lender doesn't ask for returns, W-2s or a debt to income ratio. If you're self employed and your accountant has done a good job lowering your taxable income, this is the loan that stops holding that against you. You'll still need credit, a down payment and money in reserve, but your income documentation is not part of the file.

What DSCR ratio do I actually need?

Most lenders want 1.0 or better, meaning the rent covers the payment. Some want 1.25 before they'll give you their best pricing. A few will go below 1.0 if you put more down or leave more in the bank, which matters a lot here because California rents often don't keep up with California prices. Tell us the rent and the price and we'll run it before you make an offer.

What if my property comes in below 1.0?

It's not automatically dead. Some lenders write below 1.0 when the rest of the file is strong, usually meaning a bigger down payment, more reserves, or a higher credit score. Others hold a hard line at 1.0 or 1.1 no matter what else you bring. This is exactly the situation where shopping more than 100 lenders is worth something, because one of them writes it and the rest don't.

Can I count Airbnb income?

Some lenders will, some won't. The ones that do usually want 12 months of booking history or a third party projection report. The ones that don't will underwrite your property at long term market rent instead, which on a good short term rental can be a huge difference. Tell us how the property actually operates before we pick a lender, because that choice decides the answer.

Can I buy it in my LLC?

Yes, with most DSCR lenders. That's usually the reason investors ask about DSCR in the first place. Have your operating agreement and your state good standing paperwork ready, because that's the single most common thing that slows a DSCR closing down. A conventional lender would make you take title personally and sort out the transfer afterwards.

What about a property with no tenant in it yet?

That works. The appraiser fills out a market rent schedule estimating what the place would rent for, and that figure becomes your qualifying rent. Expect a slightly larger down payment or more in reserve than you'd need on an already leased property. It also means that appraisal is doing real work on your file, so it's worth making sure the property shows well when the appraiser walks it.

Can I take cash out of a rental I already own?

Yes, and it's how most portfolios actually compound. You refinance the property you've got, pull equity out, and use it as the down payment on the next one. How much you can take and how long you need to have owned it first varies quite a bit between lenders, so if this is the plan, say so up front and we'll pick the lender with that in mind.

Does it work on a duplex or fourplex?

Yes. Most DSCR lenders write 1 to 4 unit residential, and every unit's rent counts toward the qualifying number, which usually makes small multifamily easier to qualify than a single family house at the same price. Down payment and reserve requirements are often a bit higher than on a single family, and they differ by lender, so it's worth comparing.

What about a jumbo loan amount?

Some lenders go there and some stop well short, which comes up constantly in Southern California because prices push investor loans past the conforming limit routinely. Expect a higher credit score requirement, a larger down payment and more reserves than a conforming DSCR loan asks for. Tell us the price early, because it narrows the lender list more than anything else on the file.

How long does it take to close?

It depends mostly on the appraisal and on how fast entity paperwork comes together, not on income documentation, since there isn't any. We'll give you a realistic estimate once we know the property and the lender, and we'll tell you where the risk of delay actually sits rather than quoting a number we can't control. Escrow, title and the appraiser all get a vote.

What does a DSCR loan cost?

Rates, points and closing costs are set by the funding lender when you apply, and they move with your credit, your down payment, your DSCR ratio and the property type. We won't quote you a number over the phone that turns out to be wrong once the file is real. What we will do is put your scenario in front of several lenders and show you what each one came back with, side by side.

Other Programs

Related Loan Options

By State

DSCR Loan Programs by State

Advanced Funding Solutions reviews DSCR investment-property scenarios across multiple states. Select a state for market-specific context, submarket coverage, and program considerations.

Alaska → Arizona → California → Colorado → Florida → Georgia → Nevada → New York → North Carolina → Tennessee → Texas → Washington →

How We Work

Our Approach

Here is what actually happens after you tell us what you are buying.

One application, more than 100 lenders

You fill out one form. We take it to the lenders whose guidelines actually fit your situation and bring back what each of them said. You are not starting over at every door.

You see the options side by side

When more than one loan could work for you, we show you both and explain the trade-off in plain language. Conventional against jumbo, bank statements against tax returns. You pick, not us.

Everything in writing before you commit

Your rate, fee and loan disclosures come to you in writing during the application, because state and federal law requires it. Anything we discuss before that is an estimate and we will tell you so.

Subject to approval

All loans are subject to credit, income, asset, property, and underwriting approval. A pre-qualification is not a commitment to lend, and your final terms are set after a complete application and lender review.

Program Disclosures

Advanced Funding Solutions is a mortgage brokerage (NMLS #1277693). Loan programs described on this page are offered through a network of wholesale lenders. Program availability, loan amounts, interest rates, points, fees, and underwriting guidelines are set by each funding lender and may change without notice. Not all borrowers will qualify for every program.

Any rates, costs, or timelines referenced on this page are illustrative only and are not a quote, rate lock, or commitment to lend. Actual rates and costs depend on the loan program, lender, credit profile, property type, occupancy, loan-to-value, and other factors, and are disclosed in writing during the formal application process as required by state and federal law.

All loans are subject to credit, income, asset, property, and underwriting approval. Pre-qualification is not a commitment to lend. State availability of specific programs varies; contact Advanced Funding Solutions to confirm whether a program is offered in your state. Equal Housing Opportunity.

Send us the address and the rent

Tell us what the property costs and what it rents for, and we will run the ratio and tell you which lenders will write it. No application, no obligation. If the numbers do not work yet, we will tell you what would have to change. Advanced Funding Solutions, NMLS #1277693. All loans are subject to credit, income, asset, property, and underwriting approval.

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