A DSCR (Debt Service Coverage Ratio) loan is designed for real estate investors who want financing based on a property’s rental income rather than personal income. This makes it easier for investors with cash-flowing rentals to qualify for purchase or refinance loans.
The DSCR measures whether a property’s operating income is sufficient to cover its mortgage payments, giving lenders confidence the asset can support itself. While factors like credit score and loan-to-value still apply, DSCR loans offer greater flexibility than traditional mortgages—making them a powerful tool for building or repositioning a portfolio.
Think Bigger: Finance 2–10 Unit Apartments
DSCR loans are especially effective for small multifamily properties. Instead of relying on your personal income, lenders evaluate the property’s ability to generate enough cash flow to cover its debt. This opens the door to more efficient financing and larger-scale investments.
Grow Your Portfolio: Unlock Equity with Cash-Out Refinancing
A cash-out DSCR refinance allows you to tap into built-up equity from your rental properties and convert it into capital for new acquisitions or business needs. The new loan replaces your existing mortgage with a larger one, and the difference is paid out at closing—qualification still based on the property’s cash flow, not your income.
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