How do you get a DSCR loan?

A DSCR loan qualifies you based on your property's rental income rather than your personal income or tax returns. Lenders calculate your debt-service coverage ratio — net operating income divided by total debt service — and most require a DSCR of 1.20 or higher. You'll need a documented rental income history, a solid down payment (typically 20–25%), and a credit score that meets the lender's floor. Start your application through ClearValue Lending to get matched with a lender whose DSCR program fits your property.

A DSCR loan lets real estate investors qualify based on a property's cash flow rather than personal W-2s or tax returns. The lender divides the property's net operating income by its annual debt obligations — if that ratio clears their floor (commonly 1.20), the loan can move forward. The Federal Reserve's H.15 release tracks the benchmark rates that influence DSCR program pricing.

What lenders actually look at

DSCR ratio — net operating income ÷ total annual debt service; 1.20+ is the common floor, though some programs accept 1.0 or even below 1.0 with compensating factors.
Rental income documentation — signed lease agreements, rent rolls, or a market rent appraisal if the property is vacant.
Down payment — most DSCR programs require 20–25% down on a purchase; cash-out refinances vary by lender.
Credit score — minimum thresholds differ by program; a stronger score expands your options and can improve pricing.
Property type — single-family, small multifamily (2–4 units), and some commercial properties are all eligible depending on the lender.
Reserves — lenders often want to see 6–12 months of mortgage payments in liquid reserves.

Steps to get a DSCR loan

Calculate your property's DSCR before you apply: add up monthly rent, subtract operating expenses (taxes, insurance, maintenance), then divide annual NOI by annual principal + interest.
Gather your documents: lease agreements or rent roll, two months of bank statements, property insurance quote, and a recent appraisal if available.
Check your credit report and resolve any errors — this takes time, so do it early.
Compare programs: DSCR loans are offered by non-QM lenders, portfolio lenders, and some regional banks; terms vary widely.
Apply through a platform that matches you to the right DSCR lender for your property type and ratio — this avoids shotgunning applications that trigger hard inquiries.

DSCR loan benchmarks

The Federal Reserve's Senior Loan Officer Opinion Survey tracks tightening or easing of CRE underwriting standards, which influences which DSCR ratios lenders will accept. — Federal Reserve — Senior Loan Officer Opinion Survey
The Fed's H.15 Selected Interest Rates release publishes current benchmark rates that DSCR programs use to set their floors and margins — check it before locking. — Federal Reserve — H.15 Selected Interest Rates
IRS Schedule E is the standard form investors use to document rental income and expenses — the same figures that feed a DSCR calculation for tax-return-based submissions. — IRS — Schedule E (Form 1040)

Key takeaways

DSCR loans qualify on property cash flow, not personal income — ideal for investors with complex tax returns.
A ratio of 1.20+ covers $1.20 of income for every $1.00 of debt service — the most common minimum.
A signed lease or rent roll is the single most important document to have ready.
A stronger credit score and larger down payment open more DSCR programs and better pricing.
Apply through a platform that matches you to one lender — it protects your credit from multiple hard pulls.

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