No W-2s, no pay stubs, no debt-to-income calculation: just whether the rent covers the payment. Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners.
The problem DSCR was built to solve
You find a rental that works. The rent covers the payment with room to spare, the numbers are obvious on a napkin, and then your accountant reminds you that last year's write-offs make you look broke on paper. A conventional lender reads those tax returns and declines you, not because the deal is bad, but because good tax planning and mortgage underwriting want opposite things from the same document.
A DSCR loan removes the tax returns from the file entirely. No W-2s, no pay stubs, no employer verification, no personal debt-to-income calculation. The lender asks one question instead: does this property's rent cover its own payment?
That single change is why so many investors use DSCR to scale past their first few properties: the loan sits outside the conventional system, so it is not bound by Fannie Mae's cap on how many financed properties one borrower can carry.
New to these loans? Start with what a DSCR loan is and why lenders can skip your income.
How the ratio actually works
DSCR stands for debt service coverage ratio. Divide the property's monthly rent by its total monthly payment: principal, interest, taxes, insurance and any HOA, together called PITIA. That is the whole calculation.
A real example
| Purchase price | $400,000 |
| Down payment at 25% | $100,000 |
| Loan amount | $300,000 |
| Principal & interest, 30-year at 7% | $1,996 |
| Property taxes | $350 |
| Insurance | $125 |
| HOA | $0 |
| Total PITIA | $2,471 |
| Market rent | $3,100 |
| DSCR: $3,100 ÷ $2,471 | 1.25 |
A 1.25 means the property earns 25% more than it needs to cover the loan. That is comfortably in the range where the best pricing lives.
1.00 is break-even: the rent exactly covers the payment. Most programs treat that as the floor. 1.25 and above unlocks the lowest rates and the highest leverage. Below 1.00 is not automatically dead: some lenders run no-ratio programs that fund a shortfall in exchange for a larger down payment and stronger reserves.
Have a rental that should qualify on its rent?
Send the address, the rent and the price. Our lending partner's team reviews the ratio and tells you whether the deal fits. The lender makes every credit decision.
What you actually need to qualify
Requirements move between lenders and they trade against each other, so read this as a system rather than a checklist. Strength in one area buys flexibility in another: a marginal ratio with a big down payment closes, while a perfect ratio with no reserves stalls in underwriting.
| What | Typical | What it does to your deal |
|---|---|---|
| DSCR ratio | 1.00 min 1.25 ideal | Below 1.00 needs a no-ratio program, more down and more reserves. Above 1.25 gets you the sharpest pricing. |
| Credit score | Varies; often 620+ | Many programs publish a floor around 620 or higher. Our lending partners' DSCR program has no minimum credit score. Either way, score drives pricing far more than eligibility. |
| Down payment | 20 to 25% | The single most useful lever you have. Adding 5% can rescue a marginal ratio, improve the rate, or both. |
| Property type | 1 to 4 units | Single family, duplex through fourplex, condos including non-warrantable, and short-term rentals. Not owner-occupied. |
| Ownership | LLC or trust | You can and generally should close in an entity. This is a business-purpose loan. |
| Documents | Lease or Form 1007 | A signed lease, or a market rent appraisal if it is vacant. No tax returns, W-2s or pay stubs. |
Two structural limits worth knowing before you go under contract. Cash-out refinances often cap lower than purchases: our lending partners lend up to 80% of value, and the lender sets any lower cash-out limit for your file. And some lenders cap two to four unit buildings and condos lower than single-family homes, so confirm the leverage for your property type before you count on 20% down.
For the full list, including which rent the lender counts and how much cash to have ready, see DSCR loan requirements in 2026.
Short on the down payment? Read why no DSCR loan is truly zero down, and the routes that come close.
What it costs in October 2026
DSCR rates commonly run above a conventional investment mortgage. That premium is what you pay for the tax returns staying out of the file, and it varies a lot from lender to lender.
Buying the rate down is worth pricing properly rather than dismissing. On a typical file the difference between no points and a bought-down rate can be a couple of hundred dollars a month, which changes the cash flow on the property for as long as you hold it.
For how each pricing factor moves the rate, and why half a point can decide whether a rental qualifies, see DSCR loan rates in 2026.
Where DSCR is the wrong tool
Worth being straight about, because using the wrong product wastes weeks.
- You are going to live in it. DSCR is business-purpose only. There is no version of this for a primary residence.
- The property needs work before it can rent. DSCR qualifies on income the property does not yet produce. The usual route is a bridge or fix-and-flip loan for the rehab, then a refinance into DSCR once it is finished and leased. That is a two-step plan, and it should be planned as one from the start.
- You have very little cash. There is no 3% down version. The equity cushion is precisely how the lender covers itself for not looking at your income.
- You need to assume or transfer the loan later. DSCR loans are commonly not assumable, and moving one between entities is rarely straightforward.
- The lender does not finance in your state. Programs are not available everywhere. Ask before you go under contract.
Short-term rentals
Airbnb and short-term rental properties are financeable on DSCR, and the underwriting differs in one important way: there is no lease to hand over. Income is established instead from short-term rental market data or from a comparable schedule prepared by the appraiser.
That makes the number less predictable than a signed twelve-month lease, so build in more margin than you think you need. A property that pencils at exactly 1.00 on optimistic occupancy is the one that comes back short.
Get your deal reviewed
Answer these and your deal goes to our lending partner's team, who will contact you about whether it is fundable and on what terms. By sending it you agree to your details being shared with them. Investment property only: our lending partners do not finance a home you will live in.
Got it.
Thank you. Your details are on their way to our lending partner's team, who will contact you shortly.
DSCR questions investors ask
What is a DSCR loan in simple terms?
A mortgage for a rental property that is qualified on the property's rent rather than on your income. The lender divides the monthly rent by the monthly payment including taxes, insurance and HOA. If the rent covers the payment, the deal can work.
What DSCR ratio do I need to qualify?
Most programs want 1.00 as a floor and reserve the best pricing for 1.25 and above. Below 1.00, some lenders run no-ratio programs, but expect a larger down payment and stronger reserves.
What credit score do I need for a DSCR loan?
Many lenders publish a minimum around 620 or higher. Our lending partners' DSCR program has no minimum credit score. Either way, your score affects pricing and leverage far more than it decides whether the lender says yes.
How much do I have to put down on a DSCR loan?
Usually 20% to 25% on a purchase. Our lending partners lend up to 80% of value on a purchase.
Do I need tax returns or pay stubs for a DSCR loan?
No. That is the point of the product. You need a signed lease, or a market rent appraisal if the property is vacant, plus bank statements for your down payment and reserves.
Can I use a DSCR loan to buy and renovate a house?
Not in one loan. Use a bridge or fix and flip loan for the purchase and rehab, then refinance into DSCR once the property is finished and leased. Plan both halves before you start the first one.
Sources
- Consumer Financial Protection Bureau, Regulation Z official interpretation of 1026.3, credit for non-owner-occupied rental property is treated as business purpose (accessed Oct 2026)
- Fannie Mae Selling Guide B2-2-03, multiple financed properties for the same borrower, the conventional cap of ten financed properties (accessed Oct 2026)
- Fannie Mae Selling Guide B4-1.2-01, appraisal report forms and exhibits, Form 1007 comparable rent schedule (accessed Oct 2026)
- Freddie Mac, "Mortgage Rates Average 7.28%," October 1, 2026, the conventional 30-year benchmark and year-ago rate (accessed Oct 2026)
- InvestorPropertyLoan, DSCR loan rates (October 2026), published DSCR pricing of 6.88% to 8.50%, tiers effective September 29, 2026 (accessed Oct 2026)
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.