DSCR Loan

Qualify based on rental income, not personal income. DSCR loans from STR Home Loans — fast closings, competitive rates, up to $2M loan amounts.

Why Choose a DSCR Loan?

DSCR loans have become the preferred financing vehicle for short-term rental investors. Unlike conventional mortgages that require extensive income documentation, DSCR loans focus on one thing: can the property pay for itself?

This approach opens doors for self-employed investors, those with complex tax situations, and anyone who wants to scale their rental portfolio without the limitations of personal income qualification.

How DSCR Qualification Works

The Debt Service Coverage Ratio is calculated by dividing the property's gross rental income by its total monthly debt obligation (principal, interest, taxes, insurance, and HOA). A DSCR of 1.25 means the property generates 25% more income than needed to cover the mortgage — a comfortable margin for lenders.

For short-term rentals, we can use projected income from AirDNA, actual booking history, or comparable property income to establish your DSCR ratio.

DSCR Loan Requirements

Getting approved for a DSCR loan is straightforward. You'll need a minimum credit score of 680, a 20% down payment, and a property that demonstrates sufficient rental income. No personal income verification, no tax returns, and no employment history required.

Eligibility Requirements

  • Minimum credit score: 660
  • Minimum DSCR ratio: 1.0 (some programs allow no ratio)
  • Investment properties only (1-4 units)
  • Minimum 20% down payment
  • Property must generate rental income
FAQ

Frequently Asked Questions

What is a DSCR loan?
A DSCR (Debt Service Coverage Ratio) loan qualifies you based on the rental income of the property rather than your personal income. If the property generates enough rental income to cover the mortgage payment (DSCR of 1.0 or higher), you can qualify regardless of your W-2 or tax return income.
Can I use a DSCR loan for an Airbnb property?
Yes! DSCR loans are ideal for Airbnb and VRBO properties. We use projected short-term rental income from platforms like AirDNA or actual booking history to calculate your DSCR ratio.
What DSCR ratio do I need?
Most programs require a minimum DSCR of 1.0, meaning the property's rental income covers at least 100% of the monthly mortgage payment. Some programs allow no ratios with compensating factors like higher credit scores or larger down payments.
How quickly can I close on a DSCR loan?
We typically close DSCR loans in 21-30 days. Because there's no income verification or tax return review, the underwriting process is streamlined compared to conventional loans.

Ready to Grow Your STR Portfolio?

Get pre-qualified for a DSCR loan in minutes. No tax returns, no W-2s — just your property's income potential.

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