DSCR Mortgage Loans

DSCR stands for “debt service coverage ratio” and is a type of Non-Qualified Mortgage loan or Non-QM loan that allows you to qualify for a home loan without relying on personal income. Another industry name for it is Investor Cash Flow loan.

The Advantages of DSCR loans

DSCR loans come with several key advantages that make them especially attractive to real estate investors:

Simplified qualification

Unlike conventional loans, DSCR loans typically do not require proof of personal income.

Minimal documentation

Borrowers benefit from reduced paperwork, streamlining the application process.

No loan limit restrictions

Investors can take out multiple DSCR loans, making this option ideal for those with diverse or growing property portfolios.

Faster approvals

With fewer requirements, DSCR loans often have quicker processing and approval times.

How do DSCR loans work?

DSCR loans allow real estate investors to qualify for a mortgage based on their rental property’s cash flow. This is different from a conventional loan that requires proof of income.

For a DSCR loan, mortgage lenders consider a debt service coverage ratio or DSCR rather than income to qualify a real estate investor for a loan. This ratio gives lenders insight into whether or not the borrower will be able to use the rental income from the property to cover their monthly loan payments.

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What is debt service coverage ratio?

A DSCR compares the income of the property to its total debt, which influences the eligibility for the DSCR loan. Lenders require a healthy DSCR to approve a loan. A good DSCR is usually 1.0 or higher, though it can vary based on other criteria.

How do you calculate your debt service coverage ratio?

DSCR = Monthly Rental Income ÷ PITIA*
For example, if a property generates a Monthly Rental Income of $100,000 annually and its debt service is $81,783 the equation would look like this:
DSCR = $100,000 ÷ $81,783 = 122
‍*Principal, Interest, Property Taxes, Homeowners Insurance & Association Dues

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Here are answers to a few questions you may have, but as with any mortgage, your loan officer is your best resource.

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With over 20 years of experience, Rodrigo Ballon, backed by CrossCountry Mortgage, provides trusted mortgage solutions for homebuyers, investors, and refinancers across Utah and beyond — delivering competitive rates, clear guidance, and personalized service every step of the way.

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