Loan options / DSCR loans
Qualify on the rent,not yourtax return.
A DSCR loan qualifies the property, not your paycheck. Instead of pay stubs and tax returns, the lender compares the home's expected rent to its monthly payment. For investors with several properties or complex returns, it may be the simplest way to add the next one.
Who it's for
For investors whose income is the property.
If you own rentals, or want to, and your tax returns do not tell the whole story, this is the loan built for you. The file is short: credit, assets, and what the property rents for.
Several rentals, one simple file
Each new property adds another Schedule E. DSCR financing sets the income math aside and looks at the deal in front of it.
Strong cash flow, aggressive write-offs
Legitimate deductions can make tax returns understate what you actually earn. A DSCR loan does not ask for them.
Buying your first investment property
If the numbers on the property work, the loan may work too. A first rental with solid market rent can qualify on its own.
Vacation and short-term rentals
Some programs allow short-term rental income to count toward the ratio. Your loan officer will tell you which properties qualify.
What you'll need
What DSCR underwriting looks for.
- Credit scoreMost programs start in the mid-600s, with better terms at 700 and above. Patriot's minimum varies by program and is subject to change; your loan officer will confirm it.
- Down paymentTypically 20–25% on a purchase. Equity requirements on a refinance are similar.
- Debt-service coverageRent divided by the full monthly payment. Most lenders look for 1.0 or higher; a lower ratio may be allowed with a larger down payment.
- ReservesUsually six months of payments after closing, sometimes more for larger portfolios.
- DocumentationNo tax returns or employment verification. You will need the lease if the property is rented, proof of assets, and an appraisal with a rent schedule.
- PropertyNon-owner-occupied residential, one to four units. Condos and short-term rentals depend on the program.
How it works
From first call to closing. Five cards, one person the whole way.
Talk to your loan officer
One call, one person. You get a name, an NMLS number, and a direct line, and that person stays on your file until you close.
Get pre-approved
We review the property, your credit and your assets. No tax returns. Most investors have a working number within a business day.
Shop with confidence
Your pre-approval letter tells sellers you are a real buyer. Your loan officer is available to your agent for questions on any offer.
Appraisal and underwriting
The appraiser values the home and completes a rent schedule, which sets the DSCR. Underwriting reviews the property, your assets and the entity if you are closing in an LLC.
Close and move in
Sign, fund, and get your keys. No prepayment penalty if you refinance or sell later.
Ways to use it
Buy, refinance, or cash out.
Purchase
Add a rental to your portfolio, in your name or an LLC, qualifying on the rent rather than your income.
Rate-and-term refinance
Move an existing rental out of hard-money, bank or seller financing into long-term financing.
Cash-out refinance
Pull equity from a performing rental to fund the next down payment or renovation.
Delayed financing
Bought with cash? Some programs let you recover your cash shortly after closing and keep buying.
Questions
Straight answers.
What is a DSCR?
Debt service coverage ratio: the property's monthly rent divided by its full monthly payment (principal, interest, taxes, insurance and any HOA dues). A ratio of 1.0 means rent exactly covers the payment; above 1.0, the property cash-flows.
Do I need to show income?
No. Personal income and employment are not part of the file. Credit, assets and the property's rent are.
Can I close in an LLC?
Usually yes, with a personal guarantee from the members. Many investors prefer this for liability reasons. Ask your attorney or CPA which is right for you.
Can I live in the property?
No. DSCR loans are for non-owner-occupied investment property only. If you plan to live in one unit of a multi-unit home, ask about FHA or conventional options instead.
What if the rent does not cover the payment?
Some programs allow a ratio below 1.0 with a larger down payment or more reserves. Your loan officer will show you where the numbers land before you commit.
How many properties can I finance?
Most DSCR programs do not cap financed properties the way conventional loans do, which is one reason experienced investors use them.
Talk to a DSCR loan officer in your state.
Licensed by name, in the state you are buying in. No call center, no hand-offs.
DSCR program terms, minimum ratios, down payment and reserve requirements vary by property type and are subject to change. This is not a commitment to lend. Belem Servicing LLC d/b/a Patriot Home Mortgage, NMLS #715386. Equal Housing Lender.