A DSCR loan is investment-property financing that uses the property’s qualifying rental income to help assess repayment capacity. Rather than relying on your salary alone, the lender compares rent with the property’s housing payment. Credit, down payment, reserves, property condition, and the lender’s rules still matter.
Can I Qualify Without W-2 Income?
Many DSCR programs assess rental income instead of qualifying you through a conventional personal debt-to-income calculation. That can make this approach useful for self-employed investors, but it does not mean “no documentation” or automatic approval. Expect the lender to verify your identity, funds, credit, and the property.
For a lender’s explanation of this approach, see Visio’s DSCR overview. Its product requirements are not a promise of Propello terms.
What Does a DSCR of 1.25 Mean?
Under a rent-to-housing-payment calculation, 1.25 means qualifying rent is 125% of the measured payment. For example, $3,000 in monthly rent divided by a $2,400 payment equals 1.25. The $600 difference is not necessarily profit: repairs, vacancy, management, and other operating costs may still come out of it.
See how to calculate DSCR with taxes, insurance, and association dues before deciding whether the numbers work.
What Else Do I Need to Qualify?
Prepare the facts that can change the answer: property address and use, purchase price or value, requested loan amount, rent, credit estimate, available cash, and whether you are buying or refinancing. Ask for the program’s actual requirements rather than assuming a single credit score or ratio qualifies every deal.
- What rent will the lender accept: the lease, appraiser’s estimate, or another approved source?
- How much cash must remain after closing?
- Does the property’s condition and rental use fit?
- Is there a prepayment charge if you sell or refinance early?
Can I Use a DSCR Loan for a Home I Live In?
These investment-property programs are not intended for your primary residence. Tell us if you will occupy any part of the property, if it needs major repairs, or if you plan to use it as a short-term rental. Those details affect which program is appropriate; do not describe owner-occupied property as an investment-only rental.
What Should I Send to Get My Deal Reviewed?
Start with the address, estimated rent, purchase price or current value, loan amount, and target closing date. For a refinance, include the existing loan balance. You do not need to know every answer before starting; flag estimates so they can be checked before you rely on a quote.
Explore Propello’s DSCR loan options or run your numbers first.
Educational information, not a loan offer. Eligibility and terms depend on the program and review of your situation. Examples are illustrative.