DSCR Loan Requirements at a Glance
Minimum Requirements (Most Lenders)
| Credit Score |
660-680 minimum (720+ for best rates) |
| Down Payment |
20-25% for purchases |
| DSCR Ratio |
1.0 minimum (1.25+ for best rates) |
| Cash Reserves |
6-12 months PITIA |
| Property Type |
1-4 unit residential, some 5-8 unit |
| Loan Amount |
$100K - $3M+ (varies by lender) |
Credit Score Requirements
Your credit score is one of the most important factors in DSCR loan pricing:
- 760+: Best rates, lowest fees, most options
- 720-759: Great rates, full program access
- 680-719: Good rates, standard programs
- 660-679: Higher rates, may need larger down payment
- 620-659: Limited lenders, higher rates, 25-30% down
- Below 620: Most lenders won't qualify
Credit Tip
DSCR lenders typically pull all three bureaus and use the middle score. If you have one low score, focus on improving it before applying.
Down Payment & LTV
For Purchases
- Standard: 20-25% down (75-80% LTV)
- Higher DSCR + higher credit: May qualify for 80% LTV
- Lower credit or DSCR: May require 25-30% down
For Cash-Out Refinances
- Standard: 70-75% LTV maximum
- Seasoning requirement: Usually 6+ months of ownership
- Some lenders offer 80% LTV with excellent qualifications
For Rate-Term Refinances
- Up to 80% LTV typically
- Lower seasoning requirements
- Used to lower rate or change loan terms
DSCR Ratio Requirements
The DSCR ratio determines if the property's income covers its debt:
DSCR Ratio Tiers
| DSCR |
Status |
Typical Terms |
| 1.25+ |
Excellent |
Best rates, full programs |
| 1.0-1.24 |
Good |
Standard rates |
| 0.75-0.99 |
Below Break-even |
"No-Ratio" programs, higher rates, more down |
| Below 0.75 |
Negative |
Limited options, significant cash reserves needed |
Cash Reserve Requirements
Lenders want to see you have "reserves" — liquid assets to cover payments if the property sits vacant:
- Minimum: 6 months of PITIA payments
- Better terms: 9-12 months reserves
- Acceptable assets: Bank accounts, stocks, retirement (60-70% value)
- Not acceptable: Business accounts (usually), crypto (varies)
Property Requirements
Eligible Property Types
- ✅ Single-family homes
- ✅ 2-4 unit properties
- ✅ Condos (warrantable and non-warrantable)
- ✅ Townhomes
- ✅ PUDs (Planned Unit Developments)
- ✅ 5-8 units (select lenders)
Ineligible Properties
- ❌ Primary residences
- ❌ Second homes/vacation homes (personal use)
- ❌ Commercial properties (5+ units usually require commercial loans)
- ❌ Land
- ❌ Mobile homes (some exceptions)
Occupancy Matters
DSCR loans are strictly for investment properties. Misrepresenting occupancy (saying it's an investment when you plan to live there) is mortgage fraud. Always be honest about your intentions.
Who Does NOT Qualify?
- Borrowers seeking primary residence financing
- Those with recent bankruptcy (usually 4+ years required)
- Recent foreclosure (usually 4-7 years required)
- Properties that don't generate rental income
- Credit scores below lender minimums
Special Borrower Types
Foreign Nationals
Many DSCR lenders work with foreign nationals who:
- Have valid passport and visa
- Can provide foreign credit report or establish US credit
- Have US bank account
- May require larger down payment (25-30%)
First-Time Investors
DSCR loans don't require prior landlord experience. However:
- Some lenders prefer 1+ investment properties owned
- First-timers may need higher credit or reserves
- Property management experience can help