DSCR Loan Requirements

Everything you need to qualify for investment property financing

Powered by Cornerstone First Mortgage

Basic Qualification Requirements

Credit Score
Minimum 620 FICO score required. Higher scores receive better pricing:
  • 780+: Best rates available
  • 740-779: Excellent pricing
  • 700-739: Good pricing
  • 660-699: Standard pricing
  • 620-659: Higher rates
Down Payment
Minimum 15% down payment required (85% max LTV).
Lower LTV = Better Rates
  • 75% LTV: Best pricing tier
  • 80% LTV: Standard pricing
  • 85% LTV: Higher rates
DSCR Ratio
Minimum 0.75 DSCR (rental income ÷ total payment).
Higher DSCR = Better Rates
  • 1.25+ DSCR: Tier 1 pricing
  • 1.00-1.24: Tier 2 pricing
  • 0.75-0.99: Tier 3 pricing
Property Type
Non-owner occupied investment properties only:
  • Single-family homes (1-4 units)
  • Condos and townhomes
  • Small multifamily properties
  • Short-term rentals (Airbnb/VRBO)
Entity Ownership
Property must be owned in business entity:
LLC or Corporation Required
  • Single-member LLC acceptable
  • Multi-member LLC acceptable
  • Corporation acceptable
  • Personal ownership not allowed
Geographic Coverage
Available in 46 states.
Not Available: CA, AZ, NV, ID
  • Properties must be in eligible states
  • No rural or remote locations
  • Standard metropolitan areas preferred

Required Documentation

No tax returns or income verification required

Bank Statements (2 Months)

Personal or business bank statements showing sufficient reserves (typically 2-6 months PITIA)

LLC Formation Documents

Articles of incorporation, operating agreement, and good standing certificate

Rent Roll or Lease Agreements

Current lease agreements for existing rentals or market rent analysis for new purchases

Property Tax Records

Most recent property tax bill or assessment for existing properties

Insurance Quote

Property insurance quote including hazard, wind (if applicable), and liability coverage

Purchase Contract (if applicable)

Executed purchase agreement for new acquisitions or refinance property details

Tax Returns (NOT Required)

Personal or business tax returns are NOT required for DSCR loans

Income Verification (NOT Required)

W-2s, pay stubs, or employment verification are NOT required

DSCR vs Conventional Investment Loans

Requirement DSCR Loans Conventional Investment
Income Verification Not Required Required (Tax Returns, W-2s)
Minimum Credit Score 620 FICO 640-680 FICO
Down Payment 15% minimum (85% LTV) 20-25% minimum (75-80% LTV)
Qualification Method Property cash flow (DSCR) Personal DTI + rental income
Entity Ownership Required (LLC/Corp) Personal ownership typical
Self-Employed Friendly Ideal for self-employed Difficult documentation
Processing Time 14-21 days to close 30-45 days to close
Short-Term Rentals Airbnb/VRBO eligible Generally not allowed
Rate Competitiveness Competitive (6.5-8.5%) Slightly lower (6.0-8.0%)
Loan Limits Up to $5 million Conforming limits ($766,550)

Tips to Improve Your DSCR Loan Approval

Maximize Your DSCR
  • Get market rent analysis to justify higher rents
  • Consider lower loan amounts to improve ratio
  • Shop for lower property taxes and insurance
  • Factor in all rental income (parking, storage, etc.)
Strengthen Your Financial Profile
  • Build up cash reserves (6+ months PITIA ideal)
  • Pay down existing debts to improve credit score
  • Avoid new credit inquiries before applying
  • Maintain seasoned bank account balances
Choose the Right Property
  • Focus on properties with strong rental demand
  • Avoid properties needing major repairs
  • Consider areas with rent growth potential
  • Ensure property meets conventional standards
Prepare Documentation Early
  • Form LLC before applying (if needed)
  • Gather 2+ months of bank statements
  • Get insurance quotes from multiple carriers
  • Organize all property documents in advance

Ready to Get Pre-Qualified?

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