DSCR Loans: Qualify on Rental Income, Not Tax Returns

A DSCR of 1.0 means the rent exactly covers the monthly payment, and most lenders want 1.25 or higher. As a rule of thumb: 1.25 and up earns the best pricing, 1.00 to 1.24 is excellent, 0.75 to 0.99 still qualifies with us, and below 0.75 we can look at reserves-based or no-ratio options. At Griffin Funding, there is no minimum ratio, so a weak number narrows your options and pricing but doesn’t end the conversation.

Our minimum is 620. Higher scores unlock better rates and lower down payments, including 15% down at 740 and above. For context, our funded DSCR borrowers in 2025 averaged a 739 score, so a mid-600s investor is well inside our credit box even if other lenders have said no.

As low as 15% with 740+ credit, and 20% is typical. A larger down payment improves your DSCR because it lowers the monthly payment the rent has to cover, which can also improve your rate. On a cash-out refinance there is no down payment; your equity does that job.

Not much anymore. Conventional loans on investment properties carry agency loan-level price adjustments that typically add 0.5% to 0.75% over the owner-occupied rates you see advertised, which puts conventional investor pricing in the same range as DSCR. The difference is what you have to hand over to qualify: a conventional investor loan still requires tax returns, W2s, and a DTI calculation. Your exact rate depends on credit score, DSCR, down payment, points, and prepayment penalty term. See how LLPAs affect your rate.

Yes. A ratio below 1.0 means the rent doesn’t fully cover the payment, and most lenders decline those files. We approve them when reserves and down-payment support the deal, and our no-ratio program doesn’t use cash flow to qualify at all.

Yes. You can borrow through a U.S. LLC with a personal guarantee, and the loan generally won’t report to consumer credit bureaus.

Title can also be vested in a partnership, corporation, S corp, or revocable trust, depending on the program. To keep your closing fast, have your articles of organization, operating agreement, EIN letter, and certificate of good standing ready when you apply.

Most do, typically 1 to 5 years, and the term you choose affects your rate: a longer penalty period means a lower rate, and buying the penalty out means a higher one. We disclose yours in writing upfront, which many unlicensed DSCR lenders won’t do. Planning to sell or refinance soon? Tell your loan officer so the structure fits. Here’s how prepayment penalties work in detail.

Griffin Funding’s fastest DSCR closing is 6 days, and the average is 34 days. No tax returns, W2s, or employment verification means less paperwork in underwriting. Pacing depends on the appraisal, title work, and borrower responsiveness, including having entity documents ready if closing in an LLC.

Generally no. DSCR loans closed through an entity aren’t reported to consumer credit bureaus, so they don’t add tradelines or payment history to your report. Two caveats: a personally guaranteed loan can still be considered when you apply for other financing, since applications ask about real estate owned and guaranteed debt. And if the loan defaults, the personal guarantee means collection activity can reach your personal credit and the default will follow you in future lending decisions. Off your report doesn’t mean off the hook.

Yes. We qualify short-term rentals using market rent from the appraisal, documented rental history, or AirDNA-style market data, depending on the program. Short-term rental files carry their own requirements, including coverage minimums and LTV limits that differ from long-term rentals, and your market must permit STR use, so bring your revenue history and your loan officer will match you to the right program. Long-term, mid-term, and short-term strategies are all eligible. Details in our guide to DSCR loans for Airbnb properties.