What Is a DSCR Loan?

Learn what a DSCR loan is, how lenders calculate the Debt Service Coverage Ratio, and why real estate investors use this non-QM financing product instead of conventional mortgages.

A DSCR loan (Debt Service Coverage Ratio loan) is a type of non-QM mortgage designed for real estate investors. Instead of qualifying based on personal income, tax returns, or W-2s, lenders evaluate the investment property's ability to cover its own debt payments using rental income.

Learn what a DSCR loan is, how lenders calculate the Debt Service Coverage Ratio, and why real estate investors use this non-QM financing product instead of conventional mortgages.