No tax returns and no debt-to-income ratio — but there is still a list. Here is every requirement, what each threshold actually is, and which ones quietly fail files.
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A DSCR loan typically requires a debt service coverage ratio of 1.00 to 1.25, 20–25% down on a purchase, a credit score of 620–680+, and three to six months of PITIA in reserves. There is no income documentation, no tax returns, and no debt-to-income calculation. The property is qualified on its rent, supported by an appraiser’s market-rent schedule.
Check your ratio first — it is the requirement that eliminates most files, and the only one you can test before spending money.
Most lenders set a floor between 1.00 and 1.25. Above 1.25 you have the widest lender choice and the best pricing; between 1.00 and 1.24 you are approvable at most DSCR lenders with a modest rate add-on; below 1.00 you are into no-ratio programs, which exist but cost more in both rate and down payment.
The detail that catches people is which payment goes in the denominator. Some lenders use principal and interest; others use PITIA, adding taxes, insurance and association dues. The same property can read as 1.28x under one convention and 1.05x under the other. Ask before you compare quotes.
Not sure which convention applies to your file? Send us the property and we will run it both ways.
| Scenario | Typical requirement |
|---|---|
| Purchase, strong ratio | 20–25% down (75–80% LTV) |
| Purchase, marginal ratio | 25–30% — more equity is the usual fix |
| Rate-and-term refinance | Commonly to 75% LTV |
| Cash-out refinance | Commonly 70–75% LTV |
| Lower-credit borrower | Expect 5–10 points less leverage |
Down payment and ratio are linked, which is why the two are worth modelling together. On a $350,000 purchase at 7.25% over 30 years, moving from 25% to 30% down drops annual debt service by roughly $1,430 and lifts a 0.99x file to about 1.06x. That is often the difference between a decline and an approval.
Want to know the exact down payment your deal needs? Submit the property and we will size it.
Most DSCR lenders start at 620–680, with the best pricing generally reserved for 720+. Credit does less work here than on a conventional loan — it prices the file rather than qualifying it — but it still moves leverage. A borrower at 660 will often see maximum LTV reduced by five to ten points against the same property at 740.
Recent mortgage lates, a foreclosure, or a bankruptcy carry seasoning requirements that vary widely by lender. These are worth disclosing up front rather than discovering at underwriting.
Expect three to six months of PITIA in verified liquid reserves after closing, with cash-out refinances and lower-ratio files often at the higher end. Retirement accounts are frequently counted at a discount — commonly around 60–70% of vested balance.
This is the requirement borrowers most often trip over, because the down payment consumes the cash and nothing is left. Reserves are verified from statements at underwriting, not estimated, so plan the closing with them intact.
Tight on reserves? Some lenders count assets others will not. Tell us what you have and we will find the ones that do.
The appraisal comes with a market-rent schedule, commonly Fannie Mae Form 1007 on single-family property. Underwriters generally use the lower of the lease in place or the appraiser’s market rent, which means a lease above market does not help you and a lease below market actively hurts.
Two consequences worth planning for. If you are buying a property rented under market by a long-term tenant, the file will be underwritten on the lower figure. And if the property is vacant, most lenders will use the appraiser’s opinion alone, which can come in conservative.
Short-term rental income is a separate question entirely. Many lenders ignore nightly revenue and underwrite long-term market rent regardless of what the property earns. Others accept documented STR history. If you are buying a vacation rental, this single question determines your lender list — see how to compare DSCR lenders.
Nearly all DSCR lenders will close in the name of an LLC, and for most investors that is the reason to use the product. What varies is the paperwork: the operating agreement, EIN, certificate of good standing, and personal guarantees from members above a threshold ownership percentage — commonly 20%.
Multi-member entities, trusts, and entities with foreign members all add conditions. Assemble these documents before you apply; missing entity paperwork is one of the most common causes of a delayed closing, and it is entirely avoidable.
Seasoning governs how long you must own a property before pulling equity out, and whether the lender uses appraised value or your purchase price to size the loan. This is the rule that decides most BRRRR refinances.
Practice varies widely: some lenders require six or twelve months at the purchase price, others will lend against appraised value with little or no seasoning where documented improvements justify the lift. If your plan is to buy, renovate and refinance, confirm the seasoning rule before you buy, not after the rehab is done.
Planning a BRRRR? Send us the deal and we will name the lenders whose seasoning rules fit your timeline.
Short list, because there is no income documentation:
No W-2s, no tax returns, no profit-and-loss statements. That is the trade the higher rate buys.
Have those? That is enough to get quotes. Start your application.
What are the requirements for a DSCR loan?
Typically a debt service coverage ratio of 1.00 to 1.25, 20 to 25% down on a purchase, a credit score of 620 to 680 or better, and three to six months of PITIA in reserves. There is no income documentation, no tax returns, and no debt-to-income ratio. The property qualifies on its rent, supported by an appraiser's market-rent schedule.
What credit score do you need for a DSCR loan?
Most lenders start at 620 to 680, with the best pricing generally at 720 and above. Credit prices the file rather than qualifying it, but it still affects leverage: a borrower at 660 will often see maximum LTV reduced by five to ten points against the same property at 740.
How much do you need in reserves for a DSCR loan?
Three to six months of PITIA in verified liquid reserves after closing, with cash-out refinances and lower-ratio files usually at the higher end. Retirement accounts are often counted at a discount, commonly 60 to 70% of vested balance. This is the requirement borrowers most often trip over, because the down payment consumes the cash.
Do DSCR lenders use the lease or market rent?
Generally the lower of the two. The appraisal includes a market-rent schedule, commonly Form 1007, and underwriters take the lower of the lease in place or the appraiser's opinion. A lease above market does not help you, and a lease below market actively reduces the qualifying income.
Can you get a DSCR loan on a property that needs renovation?
Usually not, because there is no rent to underwrite. A property that cannot be rented in its current condition is a fix-and-flip or bridge deal, then a DSCR refinance once it is stabilised and leased. Confirm the lender's seasoning rule before you buy if that is the plan.
What documents does a DSCR loan require?
The purchase contract or existing note, leases for occupied units, two to three months of bank statements for down payment and reserves, entity documents including the operating agreement and EIN, an insurance quote, photo ID, and a schedule of other properties owned. No W-2s, tax returns, or profit-and-loss statements.
Send the address, the rent, and the purchase price. We will tell you where the file stands on ratio, leverage and reserves — before you pay for an appraisal.
Once you clear these, see what sets your rate.