DSCR Loans for Real Estate Investors
Qualify based on property cash flow, not personal income. No tax returns or W-2s required. Perfect for real estate investors building their portfolio.
What is a DSCR Loan?
A DSCR (Debt Service Coverage Ratio) loan is a type of non-QM (non-qualified mortgage) loan offered by American Pacific Mortgage specifically designed for real estate investors. Instead of verifying your personal income using pay stubs, W-2s, or tax returns, the lender evaluates the property's ability to generate rental income and its net operating income (NOI).
The DSCR is calculated by comparing the property's gross rental income with its monthly debt obligations (mortgage payment, taxes, insurance, HOA). For example, a DSCR of 1.25 means the rental income is 125% of the monthly payment. APM accepts DSCR ratios below 1.0 depending on the overall strength of your loan profile and down payment.
Why Choose DSCR Loans?
No Income Verification
No tax returns, W-2s, or pay stubs required. Qualify based solely on property cash flow.
Unlimited Properties
No limit on the number of financed properties. Perfect for scaling your investment portfolio.
Business Entity Vesting
APM's DSCR loan allows vesting in an LLC or other business entity for liability protection.
Fast Approval
Streamlined process with fewer documents means faster closings.
Expanded Property Types
Non-warrantable condos, condotels, manufactured homes, and multifamily (up to 4 units).
High LTV Without PMI
Up to 85% loan-to-value with no private mortgage insurance required.
DSCR Loan Requirements
Basic Qualifications
- ✓Credit Score: 660+ (higher scores get better rates)
- ✓Down Payment: 15-25% depending on DSCR ratio
- ✓DSCR Ratio: 1.0 minimum (below 1.0 accepted with strong profile)
- ✓Property Type: Investment property only (not primary residence)
- ✓Loan Amount: Up to $3 million
Required Documents
- ✓Rental agreement or lease (current or projected)
- ✓Property appraisal
- ✓Proof of down payment funds
- ✓Credit report
- ✓Property insurance quote
How DSCR is Calculated
DSCR = Monthly Rental Income ÷ Monthly Debt Obligations
Example Calculation:
Monthly Rental Income: $2,500
Monthly Mortgage Payment (PITI): $2,000
DSCR = $2,500 ÷ $2,000 = 1.25
✓ This property qualifies! (DSCR above 1.0)
A DSCR of 1.25 means the property generates 25% more income than needed to cover the debt. Higher DSCR ratios typically qualify for better interest rates.
Who Should Consider DSCR Loans?
Self-Employed Investors
If you write off significant expenses on your taxes, your tax returns may not reflect your true income. DSCR loans eliminate this problem.
Portfolio Builders
Already own multiple rental properties? DSCR loans have no limit on the number of financed properties, unlike conventional loans.
High-Income Earners with Complex Taxes
Doctors, attorneys, business owners, and executives with complex tax situations benefit from simplified qualification.
Foreign Nationals
Invest in U.S. real estate without U.S. income documentation or credit history.
Ready to Grow Your Investment Portfolio?
Marcus Vogt at Q Home Loans specializes in DSCR loans for real estate investors in Washington and Idaho. Get expert guidance and competitive rates.